Globalization

For more information on globalization, visit Britannica.com.

The tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets. Globalization has had the effect of markedly increasing not only international trade, but also cultural exchange.

Investopedia Says:
The advantages and disadvantages of globalization have been heavily scrutinized and debated in recent years. Proponents of globalization say that it helps developing nations "catch up" to industrialized nations much faster through increased employment and technological advances. Critics of globalization say that it weakens national sovereignty and allows rich nations to ship domestic jobs overseas where labor is much cheaper.

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Interdependence of buyers and sellers of financial instruments in financial centers around the world. This phenomenon is due mainly to several factors: (1) the maturation of the Eurocurrency markets since the 1960s; (2) dramatic changes in trading room technology in recent years, providing market makers with near instantaneous access to current market data on commodities and financial instruments; (3) a desire by financial institutions to expand lending and other activities beyond geographic boundaries; and (4) a desire to control balance sheet risk through Interest Rate Swaps and other financial swap agreements.

For example, the growing use in international financial markets of marketable debt instruments, principally in the Eurobond market, as opposed to traditional bank lending, as a financing vehicle for major corporate borrowers, and also sovereign governments. The shift away from bank credit instruments, such as Note Issuance Facilities, toward Floating Rate Notes and Eurocommercial paper began in the early 1980s, and was aided by the strong secondary market in Eurobond financings. Both commercial banks and investment banks participate in this market. Outside the United States, U.S. Commercial banks are not confined by Glass-Steagall Act limitations on securities underwriting, and are active participants in the Eurobond market.

Advances in Information Technology allowed traders in foreign exchange and other money market instruments to manage positions on a 24-hour basis, by moving their trading book to a different financial center at the close of trading. This practice, known as passing the book, permits financial institutions that make markets in New York, London, or Tokyo, for instance, to maintain a single trading book listing positions, limits, and exposures for the entire firm, rather than keeping separate books in each trading center.

Globalization is the process by which the economies of countries around the world become increasingly integrated over time. This integration occurs as technological advances expedite the trade of goods and services, the flow of capital, and the migration of people across international borders. The term has been used in this context since the 1980s, when computer technology first began making it easier and faster to conduct business internationally. Globalization can also refer to the efforts of businesses to expand their operations to new countries and markets.

According to a cover story in Business Week, globalization "has created millions of jobs from Malaysia to Mexico and a cornucopia of affordable goods for Western consumers. It has brought phone service to some 300 million households in developing nations and a transfer of nearly $2 trillion from rich countries to poor through equity, bond investments, and commercial loans. It's helped topple dictators by making information available in once sheltered countries. And now the Internet is poised to narrow the gulf that separates rich nations from poor nations even further in the decade to come."

Without a doubt, globalization has had a number of positive effects on nations and businesses around the world. Yet the concept—once regarded as almost universally positive—has undergone a bit of a reassessment in recent years. In fact, widespread protests against the World Trade Organization (WTO) and consumer boycotts arising from the practices of multinational corporations in developing countries have raised public awareness of the hazards of globalization. "The plain truth is that market liberalization by itself does not lift all boats, and in some cases, it has caused severe damage to poor nations," the Business Week article admitted. "What's more, there's no point denying that multinationals have contributed to labor, environmental, and human rights abuses as they pursue profit around the globe."

The Controversy Over Globalization

Globalization gives companies access to wider markets and consumers access to a greater variety of goods and services. But the benefits of globalization are not always shared by all of the parties involved in trade. Unfortunately, developing countries—which need the potential benefits of globalization the most—are often the losers. "The downside of global capitalism is the disruption of whole societies, from financial meltdowns to practices by multinationals that would never be tolerated in the West," the Business Week article noted. "Industrialized countries have enacted all sorts of worker, consumer, and environmental safeguards since the turn of the century, and civil rights have a strong tradition. But the global economy is pretty much still in the robber-baron age."

Some people view globalization in positive terms, as a key force in promoting worldwide economic development. But others believe that unrestricted global trade will only serve to increase the inequality between developed and developing countries. In reality, globalization offers both opportunities and risks for developing countries, and there is a great deal of variation in their experiences with it. Some regions, like Asia, have integrated into the global economy quickly and achieved economic growth as a result. But other regions, like Africa, have suffered from increased political instability, poverty, and environmental degradation since they became involved in international trade. "The real question isn't whether free markets are good or bad," the Business Week article stated. "It is why they are producing such wildly different results in different countries. Figuring out that answer is essential if businesses, government leaders, and workers are all to realize the benefits of global markets."

In the late 1990s, there was a great deal of debate about how advanced economies and multinational corporations could help developing nations to share in the benefits of globalization. Some experts claim that developing nations need debt relief, an increased flow of direct financial investment and technology, and unrestricted access to markets in advanced countries in order to begin catching up. Others claim that these measures are pointless unless the leaders of the developing nations show a willingness to establish a stable government and invest in the education of their citizens. "Before trade and foreign capital can translate into sustainable growth, governments first must deliver political stability, sound economic management, and educated workers," the Business Week article argued. Otherwise, foreign investment would likely lead to government corruption and the exploitation of workers.

The potential problems with globalization are not limited to developing nations, however. Some workers in advanced economies—particularly those in unskilled jobs and belonging to labor unions—feel that they are being increasingly displaced by low-wage competition in developing countries. Some of these workers are unable to make the transition to skilled jobs and service-oriented industries. Other critics of globalization claim that integration into a global economy reduces the sovereignty of nations, especially in regards to economic policy making. They worry that advanced nations will face limited choices in tax and monetary policies under the rules of world trade.

The concerns of developed and developing countries overlap to create a complex web of problems for globalization. Some countries will inevitably be viewed as trying to impose their values on other countries. "Balancing growth with environmental and labor regulations is wrenchingly complex in countries where people live on the margin," according to Business Week. "Many poor nations fiercely resist discussion of labor or environmental issues in the WTO because they feel the process will be hijacked by Western protectionists. The feeling is that Western unions will shield jobs at home by imposing standards that drive up labor costs in emerging markets to levels where developing nations can't compete."

The Role of the Wto

In the late 1990s, much of the controversy over globalization focused on the World Trade Organization (WTO). The WTO was established in 1995 to facilitate world trade and resolve disputes between nations. Headquartered in Geneva, Switzerland, the WTO had 134 member nations in 1999, three-quarters of which were developing nations. According to Simon J. Evenett in an article for Finance and Development, the WTO "serves the developing countries' interests by facilitating trade reform, providing a mechanism for settling disputes, strengthening the credibility of trade reforms, and promoting transparent trade regimes that lower transaction costs."

Shortly after it was established, the WTO became a lightning rod for controversy over globalization. "Seen through one lens, the World Trade Organization is a benevolent United Nations of trade, with just enough enforcement powers to help nations work out their differences," Steve Wilhelm wrote in the PugetSound Business Journal. "Seen through another lens, the WTO is a menacing, corporate-dominated world government of trade in which the legislative body and the courts operate outside the scrutiny of anyone who's not a government leader or corporate lawyer. From this viewpoint, the organization's power to adjudicate trade disputes also gives it the power to override national laws, including environmental protections. In a sense, it compromises the sovereignty of its member nations."

The two main issues embraced by anti-WTO activists are the rights of laborers and protection of the environment. "As production and consumption grow around the world, many impacts fall on the people who supply labor to produce things, and the environment that supplies the raw materials and absorbs the effluent," Wilhelm noted. Those who oppose the WTO worry that global free trade will threaten hard-fought labor and environmental victories in the United States and other developed nations. For example, activists protested that—under WTO rules—the United States could not prevent the import of shrimp caught in nets that also caught an endangered species of sea turtle.

Protesters were also concerned about the loss of American jobs overseas and the poor social and environmental records of multinational corporations operating in developing countries. "The heady, unrealistic days of globalization appear to be over," Business Week noted. "Where once it was promised that the simple spread of markets would melt poverty, dissolve dictatorships, and integrate diverse cultures, today the mere mention of globalization generates anger, discord, and accusations."

Four Levels of Globalization

Globalization most often refers to the increasing degree of connection between various countries and their economies. But another definition involves the efforts of businesses to expand their operations into foreign markets. This definition has gained importance with the advent of the Internet, which gives all companies the potential to achieve global reach in their operations.

As Jennifer Derryberry wrote in Sales and Marketing Management, businesses generally operate at one of four basic levels of globalization. The first level is a multidomestic company. At this level, the business consists of several independent units that operate in different countries, with little communication between them. The second level, an international company, maintains a headquarters in one country and operates branches in other countries. At this level, the company is likely to impose its home country bias on other markets rather than making a true effort to integrate into the global economy.

The third level of globalization, a transnational company, consists of loosely integrated business units in several countries. At this level, the company makes a greater effort to address the local needs of operations in each country. The fourth level of globalization is a truly global company. This type of business views the world as a single market, develops an overall strategy for its various operations around the world, and applies the lessons of each country to ensure its global success. Derryberry noted that this is the ideal level for a globalizing organization, but that it is not easy to achieve.

Further Reading:

Bates, Jenny. "Get Globalization Message—and Agenda—Right." Journal of Commerce and Commercial. April 27, 2000.

Bruce, Barnard. "A Brief History of the WTO." Europe. November 1999.

Derryberry, Jennifer. "What It Really Means to Go Global." Sales and Marketing Management. December 1999.

Evenett, Simon J. "The World Trading System: The Road Ahead." Finance and Development. December 1999.

Gilpin, Robert. The Challenge of Global Capitalism. Princeton University Press, 2000.

"Global Capitalism." Business Week. November 6, 2000.

"Globalization: Lessons Learned." Business Week. November 6, 2000.

International Monetary Fund. World Economic Outlook. May 2000.

Micklethwait, John, and Adrian Wooldridge. A Future Perfect: The Challenge and Hidden Promise of Globalization. Times Books, 2000.

Wilhelm, Steve. "Labor, Ecology Issues Are at Heart of Protests." Puget Sound Business Journal. November 12, 1999.

Woods, Bob. "The New Economy." Chief Executive. August 2000.

The increase in the volume, scale, and velocity of social (and environmental) interactions. Globalization is not new, pre-dating colonialism, and Massey (Geography 87) points out that the current manifestation of globalization is ‘not a force of nature…[but] a political and economic project which requires the…efforts of the World Trade Organisation, International Monetary Fund, United States of America, multinational corporations, World Bank etc., to push it forward’.

The recent swift progress of this ‘neoliberal’ globalization also results from vertical integration, the development of advanced information technology and communications, economies of scale in mass transport systems, and the liberalization of national and international regulatory frameworks. These now allow global corporations to locate wherever they wish, triggering world-scale flows, processes, and production systems. World investments are no longer geographically constrained, but can flow to places offering the best returns; foreign direct investment in the late 1990s grew twice as fast as world trade (though mostly in proximate states).

The result of this increased mobility of capital is a radical restructuring of the global economy. The core capitalist countries (USA, Western Europe, and Japan) have experienced a period of de-industrialization—most of their manufacturing jobs were shipped to less economically developed countries as transnational corporations took advantage of the cheaper labour, cheaper regulations, and hence cheaper production costs there (N. Henry, C. McEwan, and J. S. Pollard, Area 34), and these nation-states have lost some of their control of capital. Interestingly, the migrations of people become more problematic as the migrations of finance become easier; the ‘borderless world’ is not a reality for a would-be migrant from less, to more, economically developed countries.

Globalization has many detractors, who claim that global capital privileges profit over local interests and deplore the ‘Westernization’ of local cultures and what they see as the negation of local identities and autonomies. Others suggest that globalization is a dialectical process; although it invades local contexts of action, it doesn't destroy them. Instead, new forms of local existence and expression emerge (Bollywood as well as Hollywood; see creolization). Local products can be globally advertised via the World Wide Web, and newly agriculturalizing countries like Kenya can sell to Western supermarkets via global commodity chains, which have lowered the threshold of entry for smaller enterprises.

A central part of the rhetoric of contemporary world politics and the subject of increasing volumes of academic analysis. It resists any single or simple definition. Although often associated with claims that the present world system is undergoing transformation, it is an old idea. There is a long tradition of writers emphasizing the external economic constraints that act upon nation states and the transforming impact of global economic processes, with Marx being amongst the most powerful and prescient. Such themes were revived in the late 1960s and early 1970s when writers on interdependence and modernization argued that the rapid expansion of international trade and investment, the increased awareness of ecological interdependence, the declining utility of military power, and the increasing power of non-state actors (multinational corporations but also religious organizations and terrorist groups) constituted a systemic shift that would increasingly undermine the traditional role and primacy of nation states. The 1970s literature on interdependence faded under pressure from two sources. First, the reappearance of superpower confrontation and the second Cold War appeared to justify those who took a more Hobbesian view of international life, dominated by military confrontation rather than economic exchange. Second, within academia, statists and realists responded vigorously, arguing, for example, that multinational corporations were closely tied to states and to patterns of interstate politics; that the state was still the most important institution of international order; that military power had not declined in its utility; and, most important of all, that the international political system with its dominant logic of power balancing remained the most important element of any theory of international politics.

However, with the end of the Cold War, academic interest shifted back to the role of external or global economic factors, this time under the broad banner of ‘globalization’. It is far from easy to gather together the wide variety of meanings attached to the term globalization. At one level it appears simple. Globalization is about the universal process or set of processes which generate a multiplicity of linkages and interconnections which transcend the states and societies which make up the modern world system. It involves a dramatic increase in the density and depth of economic, ecological, and societal interdependence, with ‘density’ referring to the increased number, range, and scope of cross-border transactions; and ‘depth’ to the degree to which that interdependence affects, and is affected by, the ways in which societies are organized domestically.

In reality, much of the muddle and inconclusiveness of the debates on globalization stem from the ambiguities of the concept. Globalization is sometimes presented as a causal theory: certain sorts of global processes are held to cause certain kinds of outcomes; sometimes it is a collection of concepts, mapping (but not explaining) how the changing global system is to be understood; and sometimes it is understood as a particular kind of discourse or ideology (often associated with neo-liberalism). There are also important distinctions between economistic readings of globalization (that stress increased interstate transactions and flows of capital, labour, goods and services) and social and political readings (that stress the emergence of new forms of governance and authority, new arenas of political action (‘deterritorialization’ or the ‘reconfiguration of social space’), or new understandings of identity or community). Within economistic readings, there are distinctions between a traditional focus on interstate economic transactions and broader shifts in transnational production-structures and the emergence of new kinds of deterritorialized markets. Distinctions are also drawn between globalization, internationalization, westernization, and modernization. And there is the important distinction between the claim that globalization should be seen as the continuation of a deep-rooted set of historical processes and the view that contemporary globalization represents a critical break-point or fundamental discontinuity in world politics.

Perhaps the most important single idea concerns the growing disjuncture between the notion of a sovereign state directing its own future, the dynamics of the contemporary global economy, and the increasing complexity of world society. More specifically, there are three broad categories of claim that globalization is having a deep, perhaps revolutionary, impact. In the first place, it is widely argued that certain sets of economic policy tools have ceased to be viable and that states face ever increasing pressures to adopt increasingly similar pro-market policies. Because of the increasing power of financial markets, governments are forced into pursuing macroeconomic policies that meet with the approval of these markets. Increasing trade also places governments under pressure to adopt pro-market policies, avoiding policies which would imply the need to harm business by taxation, or to raise interest rates as a consequence of increased borrowing. They also find themselves forced to cut back the role of the public economy in order to attract inward investment from increasingly footloose multinational companies quick to punish governments who stray from the path of economic righteousness by exercising their exit option. Consequently, the range of policy options open to governments is claimed to be dramatically reduced.

A second cluster of arguments relates to the degree to which globalization has created the conditions for an ever more intense and activist global or transnational civil society. The physical infrastructure of increased economic interdependence (new systems of communication and transportation) and the extent to which new technologies (satellites, computer networks, etc.) have increased the costs and difficulty for governments of controlling flows of information, has facilitated the diffusion of values, knowledge, and ideas, and enhanced the ability of like-minded groups to organize across national boundaries. Transnational civil society, then, refers to those self-organized intermediary groups that are relatively independent of both public authorities and private economic actors; that are capable of taking collective action in pursuit of their interests or values; and that act across state borders. Globalization writers have laid great emphasis on the roles played by non-governmental organizations, social movements, and multinational corporations, but such activity also includes transnational drug and criminal groups and transnational terrorism. The analytical focus of much of this work has been on transnational networks—for example, knowledge-based networks of economists, lawyers, or scientists; or transnational advocacy networks which act as channels for flows of money and material resources but, more critically, of information and ideas.

A third cluster of arguments suggests that it is institutional enmeshment rather than economic transactions or the ‘reconfiguration of social space’ that has most constrained the state. On this view, states are increasingly rule-takers over a vast array of rules, laws, and norms that are promulgated internationally but which affect almost every aspect of how they organize their societies domestically. Proponents of this view highlight the tremendous growth in the number of international organizations; they point to the vast increase in both the number of international treaties and agreements and the scope and intrusiveness of such agreements; and they suggest that important changes are occurring in the character of the international legal system (the increased pluralism of the process by which new norms and rules emerge; the appearance of more and more ‘islands of supranational governance’ (such as the EU or the WTO); the blurring of municipal, international, and transnational law; and the increased importance of informal, yet norm-governed, governance mechanisms, often built around complex transnational and transgovernmental networks).

The critics attack along a number of fronts. First, they highlight the lack of clear and consistent definitions of globalization and the deep ambiguities as to what ‘globalization theory’ is supposed to involve or explain. Second, they point to the mounting empirical grounds for scepticism, for example: that levels of globalization are not higher or more intense than in earlier periods (especially the period before WW1); that there is no clear evidence of state retreat, of welfare states being cut back because of globalization pressures, of transnational capital standing in automatic opposition to social welfare, or of globalization being the most important factor in explaining levels of inequality in OECD countries. Whilst many of the changes and challenges of globalization are very real, the critics argue that they do not point in a single direction and certainly do not provide secure grounds for accepting the claim that some sort of deep change or transformation is under way. Third, the critics argue that globalization has been driven not by some unstoppable logic of technological innovation, but by specific sets of state policies, backed by specific political coalitions. This suggests that states themselves are not passive players and that the impact of globalization will often depend on national-level political and institutional factors. Equally, even where liberalizing effects can be attributed to globalization, it is not always the case that this implies state retreat—as in the process by which privatization and deregulation have involved re-regulation. Nor does globalization inevitably push governments towards declining state activism. It can, on the contrary, lead to increased pressure on government to provide protection against the economic and social dislocations that arise from increased liberalization and external vulnerability. Finally, the critics remain deeply unconvinced by the arguments for systemic transformation, highlighting the degree to which international institutions are created by states for particular purposes and the evident capacity of powerful states to resist or even abandon such institutions; the continued importance of military power controlled by states and of political boundaries and of national allegiances even in regions of dense economic and societal interdependence; and the very deep resistance of the United States as the global hegemon to contemplate giving up its own sovereignty and the capacity of the United States to both shape and resist the course of globalization.

— Andrew Hurrell

Globalization became a buzzword following the end of the Cold War, but the phenomenon has long been a factor in the foreign relations of the United States and has deep roots in history. To the extent that it meant the expansion of trade and investments, it can be defined as economic expansion, as in the transition from territorial expansion in the nineteenth century to the increasing internationalization of markets in the twentieth century. In the aftermath of World War II, economic internationalism, or the suggestion of growing interdependence of nations and the development of international institutions, seemed to capture the essence of what more recently has been termed globalization. But such usages are too limited; they do not adequately define a phenomenon that shaped American diplomacy and its constituent elements of economics and culture.

Definition and Conceptualization

"Globalization" is a fairly new term. Professor Theodore Levitt, a marketing professor at the Harvard Business School, apparently first employed it in a 1983 article in the Harvard Business Review. It is arguable, however, that the basic concept dates to the first humans. Defined broadly, globalization is the process of integrating nations and peoples—politically, economically, and culturally—into a larger community. In this broad sense, it is little different from internationalization. Yet globalization is more than this incremental process that over the centuries has brought people and nations closer together as technological innovation dissolved barriers of time and distance, and enhanced flows of information promoted greater awareness and understanding.

The focus, as the term suggests, is not on nations but on the entire globe. Consequently, a more sophisticated definition might emphasize that contemporary globalization is a complex, controversial, and synergistic process in which improvements in technology (especially in communications and transportation) combine with the deregulation of markets and open borders to bring about vastly expanded flows of people, money, goods, services, and information. This process integrates people, businesses, nongovernmental organizations, and nations into larger networks. Globalization promotes convergence, harmonization, efficiency, growth, and, perhaps, democratization and homogenization.

Globalization also has a dark side. It produces economic and social dislocations and arouses public concerns over job security; the distribution of economic gains; and the impact of volatility on families, communities, and nations. Many also worry about a growing concentration of economic power; harm to the environment; danger to public health and safety; the disintegration of indigenous cultures; and the loss of sovereignty, accountability, and transparency in government. These, too, are issues that have been topics of concern to American diplomats and foreign policymakers throughout the twentieth century.

There are two principal drivers to globalization: technological innovation and changing ideas about how to organize and regulate economic activity. Rapidly changing technologies for transportation and communications continue to dissolve the barriers of time, distance, and ignorance that once complicated long-range relationships. In the twentieth century some of the most important technological innovations that changed diplomacy were the jet plane, satellite communications, fiber-optic cables, and the Internet. Ideas also shape globalization, particularly the widespread belief that free trade, private enterprise, and competitive markets promote efficiency and economic growth. Another set of ideas also influences the globalization process: the belief among international lawyers that harmonization of standards, rules, and legal systems is the most appropriate way to resolve business conflicts. The impact of technology and ideas are the building blocks of globalization, and have shaped U.S. power, policy, and diplomatic conduct.

The globalization process has other independent drivers. In the history of the modern world, a rising population in less-developed areas frequently has triggered emigration to areas of economic opportunity, and this in turn has frequently produced a stream of remittances to family members who remained behind. Famine and malnourishment, as well as the need for energy and industrial raw materials to support advanced economies, also affect the globalization process, promoting greater flows of materials, food, and goods, and thus enhancing the interdependence of people and economies. Also, two World Wars, a Cold War, and the Great Depression disrupted in significant ways the ongoing globalization process through much of the twentieth century. Finally, leadership is an important element of all human activity. Had the United States, as the world's leading economic and military power in the twentieth century, not committed its public policy to promoting an open, and nondiscriminatory, international economic system, it is quite possible that the globalization process would have taken a different course—perhaps one that gave priority to regional blocs.

In explaining the emergence of globalization, it is almost trite to observe that the underlying forces of technology and economics have transformed the traditional nation-state system and compressed once-formidable barriers of time and space. But post–Cold War globalization did just that, although the process had roots in the late-nineteenth-century growth of American power. The concept, therefore, requires scholars of foreign relations to leap outside of the normal parameters of the nation-state and political-military affairs and take into account such elements as the flows of goods, services, and money; the increasing international mobility of people (and especially business professionals and skilled workers); the emergence and growth of large corporations that view the world as a single market in which they allocate resources, shift production, and market goods; the expansion of financial, legal, insurance, and information services; and the interconnections of cultures, customs, political processes, and ideas.

Mindful that the concept addresses historical transformations, scholars in political science, economics, linguistics, anthropology, geography, law, art, and film studies help to define the term. Political scientists, economists, and business historians have accurately identified techno-economic globalization as the precursor of other forms of globalization, such as transnational cultural exchanges. That is, the open and expanding market, in a synergistic relationship with technology (including scientific developments), has given rise to concomitant political, institutional, social, intellectual, and diplomatic changes. Economics and technology exert an enduring impact on international relationships, seemingly proceeding on their own separate tracks but not immune from events.

This calls into question the interpretation of economic determinists, for globalization complicates while it also complements Marxism, corporatism, and the like. To be sure, the power of markets associated with money, goods, services, and information facilitates international relationships, but it does so in diverse ways. Wealth is only one of the critical factors propelling the global economy. When viewed from a perspective of globalization, Marxism overemphasizes capitalism's contradictions of overproduction and underconsumption, diverting attention from the impact of economic and business concerns on diplomacy. Corporatists tend to discount the influence of strategic, humanitarian, and idealist considerations in government circles and within the private sector as well, while world systems theorists draw on an international lineup of states rather than global, private-oriented networks.

Traditional approaches to diplomatic history, including post-revisionism, also ignore the globalization construct in that they relegate economics and technology to a second tier in their levels of analysis. Globalization requires attention to nongovernmental actors, including religious and philanthropic organizations, consumer and environmental groups, workers, and unions, along with those active in business and finance. By including these groups, globalization lends an appreciation to the variety of concerns in U.S. foreign relations, from national security to advancing national ideals to humanitarian concerns.

Globalization is also not event or crisis driven, which are common foci for diplomatic historians. Instead, it explores the factors that are significant to diplomacy in the long run. For instance, the dispute between Guatemala and the United Fruit Company that led to the ouster of the government of Jacobo Arbenz Guzmán in 1954 is considered a crisis point in Cold War diplomacy. But just as important is discussion of the efforts of Carl Lindner, owner of United Fruit's successor, Chiquita Brands. He opened Western European markets to exports of Central American bananas by using the power of the purse to reward American politicians of both parties, thus placing his agenda at the cutting edge of U.S. trade diplomacy toward the European Common Market. Diplomatic history can account for such actions, which are often hidden by more traditional approaches, by placing the Guatemala episode and other flash points in the context of the globalized expansion of business and culture.

With its application to the many strands of the historiography of U.S. foreign relations, it is clear that globalization promotes new ways of explaining American diplomacy. And because globalization is a historical phenomenon, scholars and commentators can draw on it as an interpretive device to examine change and continuity across the world at various times. Technology and economics have long colluded with each other, beginning at least with the Industrial Revolution. Yet conquests, trade, slavery, and religious expansion, across the world as it was then known, have occurred farther back than that. The spread of Islam, the Crusades, the Roman Empire, and continuous agricultural revolution all represented the inexorable push of the market and technology that lay at the foundation of globalization. Economic globalization undergirded strife, growth, and interchange within and beyond local boundaries throughout history, but the globalizing economy, through the penetrating impact of technology, has also changed culture and politics. Globalization is of a synthetic quality in that it addresses the factors that comprise American diplomatic history; it helps group priorities in foreign relations and explain them in a coherent way.

First Era of Modern Globalization: to 1914

The current brand of globalization in American diplomacy can be traced back to the post–Civil War era, when internationalization and Americanization emerged in U.S. ideology and expressions of power. From this period to World War I, globalization came under the rubric of Anglo-American control of the transatlantic economy. From about 1850 to 1914 an international economy existed, managed by Great Britain, resting on free trade and open capital markets and reliant on colonies and developing areas as resource bases and on consumers in advanced nations. It was in the midst of this first international industrial economy that the United States rode to world power on the strength of its economic muscle and competed with Europeans, spurred on by production and technological inventions.

This period did not experience the revolutionary form of globalization that characterized the post–Cold War years, with their highly synchronized and integrated worldwide communications, transportation, and politics. In the earlier era, less production was attributed to foreign operations. Those affected by globalization were mostly of the elite, rather than the masses, in the early twentieth century. In the pre–World War I period, it was clear which nation controlled production, marketing, culture, and the like, while the multitrillion-dollar world market of the 1990s and beyond had no natural owners. The velocity of globalization in the pre-1914 years was immensely slower than at the end of twentieth century, as were the volume and the scope. The years before World War I did not witness the fundamental transformation in the global economy that started in the last century's final two decades.

Evident in the earlier era, however, were improvements in technology and a greater volume of world economic connections that indicated the influence of globalization on American power, diplomacy, and the economy. However, remarkable changes wrought by new business networks were not fully understood by diplomats back then. Some policymakers noted the importance of new technology and economic relationships; the presidents of these times, for instance, became more aware of global economic concerns. That was particularly true of William McKinley, known for the protectionist tariff with his name but actually a far-sighted globalizer. But they could not possibly foresee all of their applications. Movement toward globalization occurred, nascent and incomplete and interrupted by events of the twentieth century though it was. Thus, it is fair to argue that globalization offered, and offers, a new paradigm in which to view not only diplomatic history, but world history as a whole.

By the twentieth century, the United States had begun to replace Britain's colonial and trans-Atlantic systems of free trade and governmentrun transportation and communication networks. The new form of organization was a structured but open economic system of private enterprise and business-friendly public support for access to foreign markets, inventions, immigration, and adherence to international law. Private enterprise could export and produce abroad, the fruits of America's leadership in technology and intellectual property. People and ideas could move easily, facilitating the outward diffusion of America's political ideals and cultural values. America practiced an informal imperialism—in which investment and trade accompanied missionaries and, on occasion, the military—that gradually superseded British industrial and agricultural power.

The early era of globalization, before World War I, was greased by the technological leaps of transportation improvements like the steamship, and by marvels like the Suez and Panama Canals, which sped European and American commerce around the globe. Transatlantic cables, then direct telegraph links to Latin America and connections through British cable to Asia, allowed American investors and merchants to communicate faster abroad, thus expanding their markets. The great expositions of the age—in Chicago in 1893, Omaha in 1898, Buffalo in 1901, and St. Louis in 1904, as well as later gatherings in West Coast cities—publicized American achievements and the promise of empire based on progress in technology. Global connections shrunk the world itself.

Globalization was also driven by the emergence of America in the international economy. Capital exports, the plethora of inventions with American trademarks that were sold overseas, and a greater presence in financial markets boosted U.S. power. For instance, one of the most successful exporters was a capital goods firm, the Baldwin Locomotive Works of Philadelphia, whose engines came to symbolize power, speed, and the march of civilization. In 1900 Baldwin exported an average of one engine a day, shipping locomotives to South America, Africa, Asia, Australia and Europe. Exports soared after its engines gained recognition for their speed and for hauling weight up steep grades. At the turn of the twentieth century, Baldwin locomotives climbed Pikes Peak, hauled the Trans-Siberian Express, roamed the Argentine pampas, and whistled past the Egyptian pyramids. In the British Empire, American firms won contracts for building railroad bridges in Uganda and supplying rails for the construction of Cecil Rhodes's Cape to Cairo Railway, a project intended to develop British trade in Africa. Elsewhere, in the world's breadbaskets, Argentine, Australian, and Russian farmers used U.S. machinery to gather grain. Here were the companies that engaged in the international economy, as well as the privately run globalized market that was outside the realm of states.

Such economic connections promoted cultural ones as well. Thus, early signs of globalization in cultural exchanges were evident in sports (the Olympic Games), marriage, tourism, entertainment (Buffalo Bill's Wild West Show), the temperance movement, missionary work, and philanthropy. Regarding the latter, American-led internationalization in the years before World War I involved magnates like Andrew Carnegie and John D. Rockefeller, who turned to global philanthropy to counteract the label of "robber baron" and to advance their social concerns. Carnegie bequeathed millions to build public libraries in the United States and throughout the British dominions. For his part, Rockefeller established a huge foundation with a global mission to promote the well-being of mankind throughout the world. The oil baron personally contributed some $530 million to foundations and his son added another $537 million, which went for medical and scientific research, public health, education, and international exchange programs. The Foundation combated yellow fever and tropical African diseases. In China it established Peking Union Medical College to spread knowledge of medicine and sanitation, conduct research, and support the medical activities of Western missionaries. In addition, Carnegie's associate Henry Phipps in 1908 donated enough money so that Washington, D.C., could host the sixth International Congress on Tuberculosis, a disease that had killed thousands across the world. His contemporary, Darius Ogden Mills, funded an expedition to Chile in 1912 that measured over three hundred of the brightest stars in one-quarter of the sky surrounding the South Pole.

Besides the globalization of science and medicine, the fortunes of Americans were also spent on human rights causes. Jacob Schiff, the famous head of the banking firm Kuhn, Loeb and Company, turned his attention in 1906 to funding the American Jewish Committee, an organization dedicated to alleviating the persecution of Jewry at home and abroad. A host of banking, mining, and export firms, moreover, poured money into relief projects before World War I. For example, the New York Merchants Association raised $8,000 to help the victims of the Valparaiso earthquake of 1906, Guggenheim Sons, W. R. Grace and Company, and others more than matched this amount. In sum, the rich in America transferred some of their wealth to the international stage, in the process moving outside the realm of nations to influence the world economy. This is the essence of globalization.

Disrupted Globalization: 1914–1939

The period from the end of World War I to 1950 also experienced some elements of globalization as new technology joined expansion in finance, trade, investment, and culture throughout the world. Yet in a major sense this was an era of deglobalization: first, the international economic system malfunctioned or broke down; then, during the Cold War, the world divided along ideological fissures.

World War I accelerated the expansion of U.S. business overseas. American firms were especially successful in replacing dominant British firms in Western Hemisphere and Asian markets. In addition, war requirements created a soaring U.S. demand for raw materials, especially copper, iron, and other key mineral products. Soon American firms, with the help of their government, began scouring the world for essential raw materials. Rubber companies acquired plantations in Sumatra, sugar producers expanded operations in Cuba, and meat packers enlarged their operations in South America. Paper companies opened pulp and papers mills in Canada, while mining companies purchased nitrate, iron, and copper mines in Chile. Oil companies explored China, the Dutch Indies, and other remote regions and invested heavily in unstable Mexico. War needs drove much of this overseas expansion, but American business leaders were not oblivious to long-term opportunities.

President Woodrow Wilson left an enduring mark on U.S. foreign relations, especially in providing American leadership for the postwar economic and financial system. But if he was the father of internationalism, then he also presided over the disruption of globalization. The defeat of the Treaty of Versailles demonstrated the variations in thinking about globalization. Prevailing sentiment was not prepared to abandon nationalism even as the expansive course of global commerce and investment and America's role in the world maintained their momentum. Americans would not fully adopt Wilsonian ideals until after the Cold War. In addition, globalization took a backseat to revolution. Mexico's new constitution under the Carranza government of Venustiano Carranza provided for restrictions on foreign ownership of land and subsoil resources. This meant that American investors would be limited to oil reserves; at the broader level, the clash was between nationalism and international legalism, with the former winning out. In Russia, the Bolshevik government survived a shaky start, including a civil war in which Americans participated, to create a decidedly anti-capitalist regime. At first the Soviet Union promoted globalization of the masses but not capital, lashing out at the imperialist nature of capitalist globalization. Moscow then retreated to building a socialist state under Communist Party control at home. Thus, the world started to split ideologically and politically even as Wilson's vision reached its expressive high point.

Yet many bankers and administration officials still sought outward, long-term solutions to promote peace and prosperity. Because Europe had bought three-fifths of American exports before the war, freer trade was a national interest after World War I. More generally, policymakers embraced internationalism. Understanding that the Great War had caused an explosion in U.S. exports and imports, that suffering farmers could be aided by overseas expansion, and that America held a key role in global finance, Republican administrations of the 1920s did not separate the international from the domestic. They pushed for globalism, albeit a less political brand than Wilson's. Global disarmament indicated one side of Republican engagement in the world. This effort energized citizens, diplomats, and businessmen into even more cooperative, internationalist endeavors during this era than before the war.

Cultural internationalism grew stronger as nations created numerous associations designed to facilitate global ties. An International Office of Museums, and International Congress on Popular Arts, and an International Society for Contemporary Music fostered linkages and understanding. In the United States, political scientists began studying the causes of war and universities offered new courses in various national histories and languages, all a reflection of the need to understand the global context in which America operated. Americans organized hundreds of scholarly discussion groups, such as the Institute of Pacific Relations, a multinational association of journalists, academics, and businessmen based in New York City. The new Guggenheim Foundation funded artistic projects and scholarly research, focusing on Latin American intellectuals. The Institute of International Education funded and directed foreign students to universities throughout the United States. Asians were the main beneficiaries, but increasingly, Latin American and European youth traveled to America to study. In this globalized ethos, Americans believed in peace and prosperity wrought by international contact. The influence of such private activity on foreign policy was extensive, demonstrating that globalization continued to some degree. Disarmament was one arena, regional stabilization and multilateralism another, and arbitration yet another.

Business made global connections in the 1920s. Air transport and travel became a reality under the machinations of Pan American World Airways under the leadership of Juan Trippe. American trade and investment multiplied. Along with the spread of radio, cinema was not only an American phenomenon but a global one as well; people around the world listened and watched the new media and thus developed some common cultural markers. Hollywood stars such as Douglas Fairbanks and Mary Pickford were known worldwide, for example.

Nonetheless, the onset of the Great Depression and World War II dealt a setback to further globalization. The globalizers of the 1920s—the Republican presidents and bureaucrats, the business and banking establishments—were ultimately limited by their own ideology and by the powerful concentration of forces that elevated the domestic economy over the international order. The effort at privatizing decisions and policy ultimately grounded itself on the Smoot-Hawley Tariff and imperial trade preferences of the 1930s, which reserved British Empire markets for member states and excluded or discriminated against outsiders such as America. And politics could not be taken out of the economy; businessmen could not be trusted with, nor were they capable of, running the global system of trade and finance. The Republican governments promoted the ideology of technoglobalization but often refused to take responsibility through policies of running the world economy. They were unwilling to make the tough moves that involved political haggling at home—on matters like reducing war debts and tariffs, for instance—that were requisites to continuing their brand of internationalism. This proved especially so when economic times spiraled from prosperity to misfortune during the Great Depression.

Paradoxically, however, as governments turned away from efforts to harmonize and integrate the international economy to cope with domestic distresses, advances in technology continued to erode the barriers of time, distance, and ignorance that separated nations and people. Some of the most significant improvements in air travel and mass communications, particularly the movies and short-wave radio, took place during the 1930s. At a time when dire economic circumstances compelled most government leaders to think local, a few leaders in government and business dared to speak up for closer international economic cooperation. Thus, Thomas J. Watson, Jr., the head of International Business Machines (IBM) and the International Chamber of Commerce, mimicked Secretary of State Cordell Hull in proclaiming that freer international economic relations meant world peace, and that if goods did not cross borders, he feared that armies would.

A World Divided: 1940–1950

World War II further threatened Anglo-American-style globalization. The Axis powers—a loose coalition of Germany, Italy, and Japan—resorted to military force to overthrow the post-Versailles world order and to establish closed, regional systems dominated from Berlin, Rome, and Tokyo. The conflict afforded the United States a second chance to provide leadership and to promote its vision of a peaceful, prosperous, and united world. The Roosevelt administration pressed plans for international rules and institutions that would structure the post–World War II global economic and political system. In joining technology with national security, the war forged an enduring partnership among business, government, and science. Afterward, the new military-industrial complex would sustain America as an economic and military superpower, develop endless frontiers for scientific discovery, and speed the globalization process.

In effect, scientists and their laboratories, with government funding and direction, contributed in a major way to the success of the war effort, and in the process they developed many new products that had commercial applications which would transform the postwar world. Atomic energy, for instance, had many peaceful applications, particularly as a source of electrical power. The mass production of penicillin transformed the treatment of disease. Also, radar provided the basis for microwave cooking. The first computers appeared during World War II to assist the military with code breaking and long-distance ballistics calculations. ENIAC, one of the first, was a huge machine, occupying 1,800 square feet and using 18,000 bulky vacuum tubes. Not until the development of transistors and the microchips that resulted from them could cheap and reliable computing power be loaded into desktop and portable units. The transistor, which was developed in 1947 and 1948, grew out of wartime research on silicon and germanium at Bell Telephone Laboratories in New Jersey. The transistor led directly to the technology of the personal computer, which itself spawned the globalized information age in the last third of the twentieth century.

No industry benefited more from wartime cooperation and federal contracts than aviation. At the outbreak of war the Boeing Company of Seattle, renowned for its seaplanes and engineering skills, had fewer than two thousand employees and was on the verge of bankruptcy. From this inauspicious beginning the company flourished on the strength of its bombers (the B-17 Flying Fortress and the B-29 Superfortress). Employment rose to nearly forty-five thousand. At the end of the war Boeing, on the strength of its experience and reputation in military aircraft production, turned its attention to the civilian market, using the B-29 as the basis of the luxurious 377 Stratocruiser that Pan American used on Atlantic routes. It contained a spiral staircase and a downstairs bar, but was soon superseded by the four-engine 707 passenger jet, launched in 1954. The latter also had roots in military work to develop a jet tanker and from wind tunnel experiments with jet engines during World War II. Thus, with government assistance, American companies like Boeing, Douglas, and Lockheed would come to dominate the rapidly expanding world market for civilian aviation.

Growth was also in order for consumer goods, which were also foundations for later globalization. Robert W. Woodruff, who had taken over the Coca-Cola Company in 1923, aimed to make his beverage an ordinary, everyday item for Americans and people around the world. He built on his foreign operations, particularly in Europe, during World War II by having Coke accompany the military overseas. Soldiers not only identified with Woodruff's product during and after the war but heroes requested it—as did an American pilot who crashed in Scotland and asked, upon regaining consciousness, for a Coke. The beverage was so pervasive that the Nazis and Japanese denounced it as a disease of American society. By war's end the company ran sixty-three bottling plants across the globe, on every continent. Its net profits in 1948 soared to $35.6 million, elevating it to near-universal acceptance as the world's beverage of choice.

The Cold War dashed the hopes of internationalists who would have facilitated the globalization of the world economy, but still strides were made toward the technoglobal system, induced particularly by governments working through the United Nations. In these instances, officials instilled international law and arbitration processes in the international economy, yet another foundation of globalization. For instance, the International Civil Aviation Organization (ICAO) pushed for global rules to govern the dynamic medium of air transport and travel. The objective was to establish international law, as well as promote order, safety, and efficient development in aviation, although ICAO authority remained limited by national desires to control lucrative commercial air traffic. The ICAO, established on a permanent basis in April 1947, provided the framework for the vast expansion of commercial airspace after World War II. By the late 1960s its 116 member nations connected markets around the world more closely by integrating various technical aspects of airplane transport, such as air navigation codes, as well as by devising a mechanism to resolve civil disputes, promote simpler procedures at borders, and boost Third World development in civil aviation—all enhancing globalization through air transport.

The protracted Cold War struggle that divided the world into two spheres of influence—one led from Washington, the other from Moscow—prompted national security considerations, rather than invisible market forces, to define international relationships. Governments continued to regulate trade and financial exchanges, despite efforts to lower barriers and promote commerce. But America's technological advantage, adaptable production processes, and access to resources, so decisive in the struggle against Axis aggressors, helped win the conflict. Also, a new generation of U.S. political and corporate leaders, familiar with mistakes made at the end of World War I when the United States shunned overseas responsibilities, chose to accept this second opportunity to guide the world. Furthermore, as it turned out, these internationalists were also better salesmen than Soviet leader Joseph Stalin and his heirs, who presided over a decrepit, controlled Soviet economy unable to satisfy basic consumer wants. Aware that a troubled world had an insatiable appetite for American values, goods, and services, U.S. leaders exploited their comparative advantage in communications and marketing to advance the American dream of democracy, mass consumption, and individual enterprise. In the long Cold War, the formula of guns, butter, and liberal ideals eventually proved a winner that spread American values on a global basis. Without America's Marshall Plan, support for Japan, and containment of the Soviet Union, the history of the Cold War might have turned out quite differently, and likewise for the course of globalization. Had the USSR won the Cold War, Soviet-directed expansion would have been far different—far more capricious, authoritarian, and state-managed—than the American-led alternative based on the rule of law, democratic elections, open markets, and the relentless energy of technology and entrepreneurship. Thus, the era of globalization that began near century's end evolved, ironically, from the deglobalized structure of the Cold War.

Globalization Undercurrents: 1951–1972

The indicators of globalization were present throughout the superpower struggle. Prosperity and peace brought greater individual mobility. Before World War I an average of 1.5 million people arrived annually at U.S. shores, with about half that many departing. Travel lagged until after World War II and then revived. Two million people arrived in 1956, 10 million in 1970. Immigration, which fell to a low of 24,000 in 1943 and stagnated during the Depression and World War II, revived slowly after the war, reaching 327,000 in 1957. The largest numbers of immigrants—many of them war refugees—continued to come from Europe, and at this time particularly from Germany. Air travel also took off. Before the 1940s the typical traveler from abroad came by sea; after World War II the traveler arrived by air. On domestic routes the number of revenue passengers rose rapidly from 6.6 million passengers in 1945 to 48.7 million in 1957 and 153.4 million in 1970. On international routes the rise was equally dramatic: from 476,000 in 1945 to 4.5 million in 1957 and 16.3 million in 1970.

Despite Cold War crises and the further regionalization of the world economy, highlighted by the launching of the European Common Market in 1957 (which lured massive American investment), a revolution in critical technologies—including transatlantic telephone service, satellite communications, computers, and jet travel—accelerated the globalization process and ushered in a new era of rapid intercontinental travel, instantaneous communications, and economic interdependence. America's humbling experience in Vietnam, dollar woes, and the rise of oil exporting nations in the 1970s did not dampen globalization. Americans still enjoyed the benefits of unprecedented prosperity spurred by technology and economic expansion overseas. They bought new homes equipped with the latest labor-saving appliances, vacationed and studied abroad, and followed breaking news and sporting events abroad on new color television sets receiving signals transmitted via space satellites. Despite domestic political turmoil, technoglobalization continued to press forward, gradually transforming the world of separate nations.

Marshall McLuhan, a Canadian who analyzed the impact of mass media on society, made the metaphor of the "global village" famous in 1962 as a reference to the new electronic interdependence that had recreated the world. At the time, McLuhan was concerned largely with how noninteractive communications like radio and television were homogenizing the world: everyone watched the same sporting events, news, and soap operas. He identified a significant trend. The late 1950s was a period of enormous change as technical developments in aviation, transportation, and communications brought cost reductions and improved service. People, goods, and capital began to move across borders, creating interactive bonds among people and between nations. These flows integrated markets, harmonized tastes, and homogenized cultures.

Some of the most significant advances involved air transportation for people and freight. In 1957, Boeing, having gambled 25 percent of its net worth on development of a long-range passenger jet, launched the 707-120, designed as both a tanker for the air force and a civilian jet. Equipped with long-range Pratt and Whitney J-57 engines, it halved flying time across the Atlantic and opened the era of cheap air travel. The number of passengers departing internationally on scheduled airliners rose 340 percent (from 4.3 million to 18.9 million) from 1957 to 1973 as airlines introduced tourist-class fares. A round-trip flight, New York to London, fell to $487. The arrival of the wide-bodied Boeing 747 in 1969 further expanded capacity and drove down costs. Originally designed as a cargo carrier, it could accommodate two containers side by side that could be transferred to trucks; soon, high-value goods were moving swiftly by jet freighter. It also offered lower operating costs at a time when fuel prices were rising.

Thus, by the early 1970s improvements in air transport made it possible for business to source suppliers and serve markets globally. From 1957 to 1973 the number of revenue ton miles for air cargo on scheduled international flights rose 866 percent from 128.2 billion tons in 1957 to 1.2 trillion ton in 1973. It would be a decade before the full impact of these improvements worked their way through the marketplace. Air service continued to expand rapidly and airfares fell. Charter service grew rapidly on the transatlantic route and fares on scheduled airliners fell below $200 (New York to London) by 1970. Millions of college students read Arthur Frommer's best-seller, Europe on $5 a Day (first published in 1957), put on their backpacks, and set out to see Europe and learn about "foreign affairs." Meanwhile, improved engine design and weight reduction led to longer-range planes. In 1976 Boeing launched the 747 SP, which had the capacity to carry 233 passengers nonstop with full payload between New York and Tokyo. By 1989 Boeing was producing the 747-400; it could carry 412 passengers for up to twenty hours at subsonic speeds.

Along with the arrival of reliable, efficient jet freight in the late 1960s, other important cost-saving developments occurred in maritime shipping, including containerization. In the 1950s longshoremen could typically handle from ten to fifteen tons of cargo per hour. The use of truck-trailer, standard-size containers, brought productivity up to from six hundred to seven hundred tons per hour. This meant faster ship turnaround, better coordination, and lower transportation costs. Beginning in April 1956, when the trucking executive Malcolm McLean first moved loaded trailers between two U.S. port cities on an old World War II tanker, containerization took off. Grace and Matson lines adopted it in 1960 and the rush to containerization peaked in 1969, during the Vietnam War. In addition, the international shipping industry developed specially designed ships for automobiles (the first auto carriers could handle from one thousand to two thousand cars) and LNG (liquified natural gas) tankers after the 1973 war in the Middle East..

Improvements in communications also boosted the globalization process. Until the mid-1950s individuals could not communicate quickly and easily across the Atlantic and the Pacific Oceans. In 1927 commercial telephone service using high-frequency radio opened between New York and London. But this interactive advance was not designed for mass communications. Radio telephones were noisy, unreliable, and costly—forty-five dollars for the first three minutes. September 1956 brought the most significant improvement in communications in over a century when American Telephone and Telegraph opened the first transatlantic telephone cable (TAT-1) by using microwave amplification techniques. The number of transatlantic telephone calls soared—climbing slowly from 10,000 in 1927 to 250,000 in 1957, and then jumping to 4.3 million in 1961. Soon large corporations such as Ford began using the telephone cable to exchange information and coordinate their over-seas operations from their U.S. headquarters. While telephone cables improved business communications among metropolitan centers, large areas of the world could not take advantage of telephone communications. Starting in the 1980s, satellite communications ended this isolation and made the emerging global village truly interactive.

The arrival of jet planes and transoceanic telephones facilitated business expansion, but so did American scientific leadership. World War II and the early Cold War saw many technological advances, and U.S. firms moved quickly to commercialize products from military research. Between 1945 and 1965 the number of patents granted in America more than doubled, rising from 25,695 to 62,857. Five times as many patents went to U.S. firms as to foreign corporations. As late as 1967 the United States accounted for 69 percent of research and development in major countries. A good illustration was the transformation of IBM, which took its domination into the global marketplace.

The Cold War generated momentum for globalization in other ways, too. National Science Foundation, National Space and Aeronautics Administration, and Defense Department contracts spurred basic research throughout the 1960s, and space research particularly spun off growth in intelligence gathering, electronics and engineering, and weaponry. Laboratories hired thousands of corporate engineers to work on missile and aerospace projects, and clusters of companies and laboratories sprouted up near major academic institutions. The space program's budget steadily increased to $1.2 billion by 1962, and steps were taken to orbit a man around the earth (via the Mercury Project from 1959 to 1962), and eventually to send him to the moon (through the Apollo Project in 1969). These were the precursors to the space shuttle and satellite communications of the 1980s and beyond, which fueled the globalization of information.

Decentralization Accelerates: 1973–1989

From the mid-1970s onward the process of world political and economic decentralization, so essential to globalization, picked up momentum. The technological transformations allowed American and other multinational firms to escape national regulations, and also helped free ordinary people from the boundaries of the nation-state. In addition, the rise of the OPEC (Organization of Petroleum Exporting Countries) oil cartel shifted global economic power away from the West. Free exchange rates, unfixed from the gold-dollar standard, gave great flexibility to international investors. American businesses would weather the energy crises and the final phase of the Cold War in different ways. With U.S. tariff barriers continuing to fall and foreign competition surging into the American market, high-cost domestic industries such as steel, autos, and machine tools lost market share to new entrants from abroad. But many bigand medium-sized firms did well in a changing, competitive environment. Firms with leading-edge technologies took advantage of market-opening opportunities to expand abroad. In the era of jet travel and networked business communications, the battle for market share was increasingly fought on a global playing field, involving all of the world's major high-income markets—Japan, Europe, and North America. Companies and nations converged as global markets for standardized consumer products appeared; transnational companies now sold the same reliable, low-priced goods in Brazil as they did in Biafra.

Even as the economic changes occurred, however, and despite the re-ignition of Cold War tensions during the late Carter and early Reagan administrations, ideological shifts occurred that reflected the emerging age of globalization. One was a new international outlook encouraged by better communications, transportation, open borders, deregulation, and the revival of nineteenth-century, laissez-faire liberalism. Business leaders began to think globally and to develop global networks that could exert influence over national political leaders through money and ideas. During the energy crisis of 1973, America's corporate elite reached out to foreign business leaders. Led by Chase Manhattan's David Rockefeller, they formed the multinational Trilateral Commission in 1973, with members from business, politics, law, and academia in America, Western Europe, and Japan. The idea was to facilitate cooperation among resource-rich nations, but outside of government supervision. Similarly, European business leaders began to meet in Davos, Switzerland, in 1982 to develop a common international strategy for European business. This network expanded in the 1980s to include world business and political leaders. In those years it launched the annual World Economic Forum, held every January and bringing together the world's movers and shakers to network, deal, and discuss public policy issues. Similarly in America during the Carter and Reagan years, business lobbying expanded from initial efforts to contain unions to the pursuit of an active agenda of deregulating markets, cutting taxes, and promoting free trade.

The deregulatory business agenda reflected another important paradigm shift that encouraged globalization. The Washington consensus had stressed an active and expansive role for the federal government, but in the 1970s economic thought turned toward a less-regulated marketplace. Under the influence of academic economists Murray Weidenbaum and Milton Friedman, a neoclassical attack on Keynesian interventionism was launched during the Reagan years. It emphasized entrepreneurship, reliance on the Federal Reserve System and monetary policy to manage the economy, tax relief, labor-market competition, deregulation, fluctuating exchange rates, and free trade in goods. In time, this consensus came to include free trade in money, or capital account convertibility.

President Ronald Reagan can be credited with fostering the second era of techno-economic globalization by expounding on the possibilities for freedom, political and economic, under U.S. leadership. He was the first president to push openly for free trade and privatization of government services, and one of the first to appreciate how new technologies of communication were transforming the marketplace and weakening the authority of totalitarian regimes. As he left office the technoglobal revolution was accelerating, bringing major changes to economics and politics, and to culture and society as well. His successors wrestled with the implications of globalization at home and abroad. They initiated new integrative bodies that restructured the global economy, such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), institutions that emphasized a rules-based economic system and liberalization of international commerce and that further integrated business processes worldwide. The freer exchanges of goods, capital, and culture inherent in globalization arose from the Cold War's ashes and took America into a new era in which transnational contacts rivaled state power.

American-Led Globalization: 1990–2001

The Clinton administration perceived that globalization had the potential to harmonize behavior, customs, and politics and usher in prosperity, development, and democracy. As the world's only superpower, the United States would lead the way toward openness, free access, and political stability. Also, President William Jefferson Clinton's enthusiasm for globalization was not shared by all Americans; many wondered if globalization was both inevitable and desirable. As the new millennium began, the business community seemed united in support of globalization, but among ordinary people there were concerns about jobs, food safety, harm to the environment, sovereignty, cultural homogenization, and the like. Americans were as unsure about the costs and benefits of this second era of globalization as they had been during the first one before World War I.

The Clinton administration veered from postwar history and adopted the universalist, integrative, and democratic posture of globalization. Economics replaced security on the U.S. policy agenda; globalization was the focus. The administration tied free markets to democracy. After the Mexican peso crisis of 1994, the president placed economic diplomacy at the center of foreign policy, supporting the consolidation of market democracy throughout the world, an ideology that put him in stride with global business but at odds with many in his own party who were tied to the traditional big government, workerprotection liberalism of the past.

The outpouring of analyses of globalization grew during the mid-1990s. Scholars, journalists, and politicians focused on the concept and process, but above all, on its influence. The widespread use of the Internet (304 million people in 2000) brought the issue into homes throughout the world. When added to the Clinton administration's oftentimes single-minded purpose of expanding American trade and investments over-seas, the establishment of NAFTA and the WTO, and the soaring rebound of the U.S. economy from a recession early in the 1990s, globalization had a certain cachet among Americans of all political stripes and economic status.

Americans were not the only ones anxious over globalization. In western Europe and many developing countries, globalization was a dirty word, associated in the public mind with American sneakers, blue jeans, burgers, and videos. The French were most skeptical. In one poll, 65 percent said globalization increased the gap between rich and poor; 56 percent thought it threatened national identity. The French Ministry of Culture sought to rally Europeans and to restrict access for Hollywood films and American television programs.

Around the world, defenders of traditional values sought to block the spread of American-style pop culture, but globalization proved a worthy foe. Iranian religious fundamentalists raided homes to confiscate videos and satellite dishes, and in neighboring Afghanistan the Taliban closed movie theaters, burned films, and denied schooling to women. Try as they might, the fundamentalists could not eradicate this powerfully projected alien culture. Their efforts merely benefited smugglers and the flow of contraband. Many discreetly hid satellite dishes to access Western television. The failure of Islamic fundamentalists to stamp out Western influences, like the inability of state-controlled societies in Eastern Europe to block the appeal of Western democracy and consumerism, demonstrated the power of mass communications in the era of satellites and videocassettes. It also underscored the global appeal of American values to the young, the well-educated, and the affluent, an amorphous yet tangible element of U.S. power in the world.

Yet the argument that globalization led to American cultural dominance ignored the appeal of the competition. At the time anti-globalization demonstrators were protesting in Seattle against the WTO in December 1999, children throughout America were gripped by the Japanese fad game Pokemon. Film industries in India and Hong Kong presented competition to Hollywood, and MTV discovered the need to vary its formula in the world's various regional markets—providing, for example, Chinese music in China and Hindi pop in India. True cultural globalization, not just Americanization, was in effect.

Among the world's cosmopolitan elite—business leaders, government officials, academics, and media types—the requirements of globalization produced a convergence. English became the predominant language of commerce and transnational communications, and business and government leaders wore Western business suits, flew in the same airplanes, stayed in the same hotels, read the same newspapers (the Wall Street Journal and the Financial Times), and communicated with cellular phones and e-mail. The acceptance of American-style globalization reflected the success of U.S. business, the need to play by the rules of the world's largest open market, U.S. leadership in technological innovation and the information revolution, and the attraction of America's universal values. It also reflected the victories over fascism, militarism, and communism during the twentieth century that allowed the Anglo-American powers to establish the United Nations system, design the institutions of international economic and financial collaboration, and press for acceptance of common standards and the rule of law that were so crucial to globalization.

The post–Cold War era of economic globalization, however, also represented a synergistic dimension in which changes in technology, business strategy, and government policies combined to produce effects far more profound than the sum of incremental steps. The changes hinged on the integration of capital markets, the growing irrelevance of national borders, and the technological leveraging of knowledge and talent worldwide. As the Internet was empowering ordinary people with information, governance of the global system became more segmented in functional supranational institutions run by specialized elites. The International Monetary Fund (IMF), the World Bank, the WTO, and the Bank for International Settlements set the rules and handed out sanctions.

Integration and mobility were keys. Production, capital flows, and workers were increasingly integrated into a global marketplace dictated by transnational corporations. In 1970 there were 7,000 transnational corporations; in 2000 the numbers were some 63,000 parents and 690,000 foreign affiliates as well as a large number of interfirm arrangements. Gross product affiliated with the production of transnationals increased faster than global GDP and global exports. The foreign affiliates of transnational corporations employed six million persons and had foreign sales of $2 trillion. Their reach in every aspect of the world economy—from production to distribution—grew exponentially. In the last half of the twentieth century, international trade accelerated. The world economy grew sixfold in that time, climbing from $6.7 trillion in constant prices to $41.6 trillion in 1998, while global exports of goods rose seventeenfold, from $311 billion to $5.4 trillion. Much of the growth occurred among units of transnational corporations and involved services, which represented one-fifth of total world trade at the end of the century. From 1970 to 2000, the volume of foreign direct investment rose almost fifteenfold; in the latter year it was twice that of 1990. By then, dozens of nations had enacted special laws to attract foreign capital.

Financial globalization, reflecting the integration of equity and bond markets, was another powerful factor driving world economic integration and growth. As in late-nineteenth-century Britain, the upper and middle classes increasingly invested their savings overseas. The assets of U.S.-based international and global mutual funds climbed from $16 billion in 1986 to $321 billion in late 1996. Forty-four million American households held mutual funds, compared to 4.6 million in 1980. Moreover, the velocity of foreign exchange transactions spiraled. In 1973 average daily turnover in foreign exchange markets was $15 billion compared to $60 billion in 1983, $880 billion in 1993; and an estimated $1.5 trillion in 1998. Moreover, in a world of electronically integrated financial markets, money flowed into and out of countries in response to changing market conditions. In 1996 foreign investors put $100 billion into Asia; the next year they withdrew $100 billion.

Technology abetted globalization. World production of technology multiplied six times between 1975 and 1986; international trade in technology soared nine times. Improvements in communications and transportation abetted the process. In 1956, eighty-nine telephone conversations took place simultaneously through the transatlantic telephone cable. By the end of the millennium, about one million conversations occurred simultaneously by satellite and fiber optics. Add in e-mail and faxes and the ease, speed, and volume of communications have been magnified. Between 1955 and 1998, ship tonnage rose sixfold; the unit cost of carrying freight by sea fell 70 percent between 1920 and 1990. The volume of air freight soared from 730 million to 99 billion ton-kilometers. As with shipping, costs fell sharply. Between 1930 and 1990 the average revenue per mile for air transportation dropped from 68 cents to 11 cents (in constant dollars).

Cheaper airfares also enhanced individual mobility. Between 1950 and 1998 international tourist arrivals rose twenty-five-fold—from 25 million to 635 million. By 2000, two million people crossed a border somewhere in the world every single day. Some of them were political refugees; others simply seeking economic opportunities. At the end of the twentieth century, some 150 million people lived outside the country of their birth. This amounted to 2.5 percent of the world's population, or one in every forty people. Many of them remitted earnings to families and relatives in native countries. From 1970 to 1998, the number of immigrants living in America tripled from 9.6 million to 26.3 million. It is estimated that immigrants from Central America remitted $8 billion a year to their home countries during the last years of the twentieth century. Many of the foreign students who entered the United States for graduate education remain, contributing to the brain drain from developing lands but augmenting the supply of highly trained professionals in America. In 1990 one-third of Silicon Valley's scientists and engineers were foreign born.

Many of the less educated who remained in their homelands, moving from countryside to city, have joined the global economy. Labor became part of a global assembly line; transnationals working for the Nike Company and other multinational firms assembled products from components manufactured in factories throughout the world, while management, administration, and research and development were done at the headquarters. Service jobs in law firms, insurance, and data entry focused on electronic production, which meant that jobs flowed in and out of countries at great speed. Globalization had, simply, changed the world and its business, including the projection of national power and diplomacy.

Along with the globalization of brands like Nike, McDonald's, Coca-Cola, and Marlboro, the process also benefited sports teams. Michael Jordan's star qualities, as well as the global reach of satellite television, established a worldwide following for the Chicago Bulls. Soccer's Manchester United and baseball's New York Yankees also appealed to extensive audiences. An influx of eastern European players strengthened the international appeal of the National Hockey League. The National Basketball Association's open-door policy to talent attracted forty-five foreign players from twenty-nine countries, and as a result the NBA broadcast in 210 countries and forty-two languages. Major League Baseball, which began opening its season in foreign locations, inaugurated the 2001 season with 854 players, 25 percent of them born outside the United States. As a result of Ichiro Suzuki's success with the Seattle Mariners, the team's home games were televised live in Japan. Thousands of Japanese baseball fans even flew to Seattle to attend home games of a club owned by Nintendo president Hiroshi Yamauchi.

Along with rapid growth and increasing integration of markets, however, the age of globalization produced greater volatility. The Mexican peso crisis of 1994 and the Asian economic crisis of 1997–1998 underscored the vulnerability of the market-driven globalization system and how quickly strife could spread in a world linked by high-velocity communication, financial, and transportation networks. The Asian economic crisis also showed globalization's impact in the political arena. It aroused concerns about the merits of Western-style, free-market globalization to an extent that street protests, stimulated by the economic downturn, forced Indonesia's dictator of thirty-two years from power while politicians jockeyed for control in Thailand, the Philippines, South Korea, and Malaysia.

Over the preceding decade Wall Street, Washington, and international financial institutions had encouraged emerging economies to deregulate capital markets and open to foreign banks and financial institutions, but countries in Latin America and Asia paid for the deregulatory bonanza. By opening their markets, they made themselves susceptible to pressures from abroad and the international economy, and also lost independence over their fiscal policies. Abrupt changes in one country, region, or the world economy reverberated throughout these poorer nations, causing crises. Yet the bankers and U.S. financial officials blamed the catastrophic consequences on crony capitalism, the lack of transparency and inadequate disclosure of financial data, the absence of independent regulatory authorities, and the inadequacy of accounting standards. They stressed the benefits of liberalization under the process of globalization.

Opposition to the pro-globalization agenda emerged among a disparate alliance of activists concerned about the environment, labor standards, and national sovereignty. In 1992 the first Bush administration had refused to accept the entire Rio de Janeiro Treaty that protected biodiversity of plant and animal species. An argument also erupted over the existence of global warming, which many scientists and environmental groups blamed on the emission of carbon-based gases into the atmosphere. A total of 150 nations, including the United States, signed the Kyoto accord of 1997 that pledged to reduce such global emissions to 5.2 percent below the 1990 level. America would cut its release of carbon-based gases by 7 percent. But President Bill Clinton faced staunch opposition from powerful business interests such as the Business Roundtable, the Chamber of Commerce, and the National Association of Manufacturers who thought the agreement flawed. The Senate voted 95 to 0 to oppose the protocol if developing countries like China and India were not also required to cut their emissions. As a result, the administration never sent the agreement to Capitol Hill for ratification. The debate over global warming continued into the 2000 election when Democratic candidate Al Gore insisted that America join the Kyoto pact nations and GOP candidate George W. Bush countered that additional studies were needed to better understand the problem. It was clear that, just as with the economy, globalization of environmental concerns might require international intervention. Environmental concerns indicated that there was not a consensus on globalization.

Many people, especially in the labor and environmental movements and within academia, shunned this new globalization system, and argued that globalization undermined stability and prosperity and was leading to the disintegration of national economies and cultures. According to this view, workers had become pawns in transnational corporate agendas, the environment had been deregulated by the free-market rules of the WTO, and financial markets had been so decontrolled that the joint efforts of a handful of individuals could destabilize entire nations (as in Indonesia in 1997). The anti-globalization protesters took to the streets to voice their objections. The WTO ministerial meetings convened in Seattle in December 1999 to plan a new set of world trade negotiations called the Millennium Round, but huge demonstrations shut down the meetings. Seattle turned out not to be an isolated event; there were later demonstrations at gatherings sponsored by the United Nations, the IMF and World Bank, and Davo's World Economic Forum.

There were also optimists who saw the free market and meteoric advances in technology as a great boon or as an irreversible phenomenon that could not be halted. They announced that the world had entered a period of unity (unlike the divisive forty-five-year Cold War) that rewarded flexibility, high technology, and individualism.

Public opinion polls showed Americans divided on such issues as globalization and free trade. In general, those in the middle class and below voiced protectionist sentiments or questioned the fairness of NAFTA and the WTO. Among those warning of the perils of globalization were Pope John Paul II, UN Secretary General Kofi Annan, and former South African president Nelson Mandela.

As the twenty-first century opened, the globalization revolution continued to roll forward. While the global spread of information, the integration of markets, and the erasure of borders had the potential to promote global peace, prosperity, and the convergence of basic values, there was a dark dimension often ignored by corporate boosters. For one, globalization benefited organized criminals as well as corporations. The turnover of the criminal economy was estimated at about $1 trillion annually. Narcotics accounted for about half, but a trade in people was also lucrative. Gangs moved from four to five million people annually and earned some $7 billion in profits. In the health area, globalization presented a number of challenges. Public health officials worried that increased human mobility enhanced opportunities for microbes. The risks ranged from trade in illegal products and contaminated foodstuffs, divergent safety standards, indiscriminate spread of medical technologies and experimentation, and the sale of prescription drugs without approval of national authorities. With some two million people crossing borders daily, industrialized nations faced threats from emerging infectious diseases, exposure to dangerous substances, and violence such as chemical and bioterrorist attack. Furthermore, the spread of information on the Internet empowered individual terrorists like the Unabomber to exact their own revenge on global society.

Globalization was a phenomenon of the twentieth century, although it was often hidden from view. Its effects on diplomacy were enormous. In the age of instantaneous communication, rapid transport, and volatile markets, it was apparent that complexities of international relationships had moved far beyond the expertise of professional diplomats and foreign ministries. Diplomats and governments no longer served as gatekeepers. In the networked world, individuals, nongovernmental organizations, and officials communicated rapidly and regularly. But while technological innovation and information had networked millions of individuals into a system without central control, it is worth emphasizing that governments helped fund the networking revolution. The U.S. government had supported basic research in high-speed computers, telecommunications, networking, and aviation, all essential to the interconnected world of globalization. Moreover, Washington's commitment to market opening, deregulation, and liberalization of trade and finance provided the policy impetus that led to a variety of international agreements and arrangements promoting an open world order. Thus have diplomacy and techno-economic globalization been linked since the post–Civil War era.

Bibliography

Aaronson, Susan Ariel. Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization. Ann Arbor, Mich., 2001.

Adler, William M. Mollie's Job: A Story of Life and Work on the Global Assembly Line. New York, 2000. By one of the growing number of critics from the labor side.

Anderson, Sarah, and John Kavanagh. Field Guide to the Global Economy. New York, 1999.

Barber, Benjamin R. Jihad vs. MacWorld: How Globalism and Tribalism Are Reshaping the World. New York, 1996. A classic account of the cultural debate over globalization.

Bauman, Zygmunt. Globalization: The Human Consequences. New York, 1998. Covers the dark side of globalization.

Beck, Ulrich. What Is Globalization? Cambridge, U.K., and Malden, Mass., 2000.

Boli, John, and George M. Thomas. Constructing World Culture: International Nongovernmental Organizations Since 1875. Stanford, Calif., 1999. Explains one of the institutional elements of globalization.

Center for Strategic and International Studies. Reinventing Diplomacy in the Information Age: A Report of the CSIS Advisory Panel on Diplomacy in the Information Age. Washington, D.C., October 9, 1998. Discusses how globalization has changed diplomacy.

Chandler, Alfred D., Jr., and James W. Cortada, eds. A Nation Transformed by Information: How Information Has Shaped the United States from Colonial Times to the Present. New York, 2000.

Dragsback Schmidt, Johannes, and Jacques Hersh, eds. Globalization and Social Change. London, New York, 2000.

Eckes, Alfred E., Jr., "Backlash Against Globalization?" Global Economic Quarterly 1 (June 2000): 117–122.

Everard, Jerry. Virtual States: The Internet and the Boundaries of the Nation State. London and New York, 2000.

Fraser, Jane, and Jeremy Oppenheim. "What's New About Globalization?" The McKinsey Quarterly 2 (1997): 168–179. Accessible and informative account of the velocity and scope of late-twentieth-century globalization compared to other eras.

Friedman, Thomas. The Lexus and the Olive Tree. New York, 1999. A spritely, optimistic analysis.

Giddens, Anthony. Runaway World: How Globalization Is Reshaping Our Lives. New York, 2000.

Gray, John. False Dawn: The Delusions of Global Capitalism. New York, 1998. A leading British conservative intellectual criticizes globalization.

Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism. New York, 1997. Anecdotal but in-depth criticism of the business globalization process by a leading progressive.

Held, David, et al. Global Transformations: Politics, Economics, and Culture. Cambridge, 1999.

Holton, Robert J. Globalization and the Nation-State. London, 1998. For the role of the state and politics.

Jameson, Fredrick, and Masao Miyashi, eds. The Cultures of Globalization. Durham, N.C., 1998. Excellent starting point for understanding the cultural aspects.

LaFeber, Walter. Michael Jordan and the New Global Capitalism. New York, 1999. A leading diplomatic history revisionist analyzes globalization through the career of a famous sports star.

Lechner, Frank J., and John Boli, eds. The Globalization Reader. Malden, Mass., 2000. Extensive coverage of all aspects of the phenomenon.

Levitt, Theodore. "The Globalization of Markets." Harvard Business Review 61 (May–June 1983): 1–11. The article in which the term "globalization" was coined.

Luttwak, Edward. Turbo-Capitalism: Winners and Losers in the Global Economy. New York, 1999.

Micklethwait, John, and Adrian Wooldridge. A Future Perfect: The Challenge and the Hidden Promise of Globalization. New York, 2000.

Mittelman, James H. The Globalization Syndrome: Transformation and Resistance. Princeton, N.J., 2000.

Oloka-Onyango, J., and Deepika Udagama. The Realization of Economic, Social, and Cultural Rights: Globalization and Its Impact on the Full Enjoyment of Human Rights. New York, 2000. A useful United Nations–based summary, including globalization's noneconomic impact.

O'Rourke, Kevin H., and Jeffrey G. Williamson. Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy. Cambridge, Mass., 1999. One of a handful of historical treatments.

Prakash, Aseem, and Jeffrey A. Hart, ed. Responding to Globalization. London, New York, 2000.

Rodrik, Dani. Has Globalization Gone Too Far? Washington, D.C., 1997. Articulate and thought-provoking early warning about the negative effects of globalization.

Rupert, Mark. Ideologies of Globalization: Contending Visions of a New World Order. London and New York, 2000.

Sassen, Saskia. Globalization and Its Discontents: Essays on the New Mobility of People and Money. New York, 1998.

Soros, George. The Open Society: Reforming of Global Capitalism. New York, 2000. Warnings of impending collapse from a giant of global finance capital.

Tomlinson, John. Globalization and Culture. Chicago, 1999. Highly theoretical treatment of the complex interaction of culture in international society.

Wallach, Lori, and Michell Sforza. The WTO: Five Years of Reasons to Resist Corporate Globalization. New York, 2000. Criticism of the globalization phenomenon from Wallach, one of the protest organizers.

Went, Robert. Globalization: Neoliberal Challenge, Radical Responses. London, 2000. Concise but balanced assessment.

Zachary, G. Pascal. The Global Me: New Cosmopolitans and the Competitive Edge—Picking Globalism's Winners and Losers. New York, 2000.

Zeiler, Thomas W., and Alfred E. Eckes, Jr. Globalization and the American Century: A New Historical Paradigm. New York, 2002. First history that addresses the synergistic relationship of globalization and U.S. diplomacy since the late nineteenth century.

— Thomas W. Zeiler

Globalization has had an impact on different cultures around the world.

Globalization (or globalisation) describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and execution. The term is sometimes used to refer specifically to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.^[1] However, globalization is usually recognized as being driven by a combination of economic, technological, sociocultural, political, and biological factors.^[2] The term can also refer to the transnational circulation of ideas, languages, or popular culture through acculturation.

Contents 1 Definitions 2 History 3 Modern globalization 4 Measuring globalization 5 Effects of globalization 5.1 Cultural effects 5.2 Negative effects 5.2.1 Sweatshops 6 Pro-globalization (globalism) 7 Anti-globalization 7.1 International Social Forums 8 See also 9 References 10 Further reading 11 External links 11.1 Multimedia

Definitions

A high level academic and an early description of globalization was penned by the American entrepreneur-turned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897.^[3] However, it was not until the 1960s that the term began to be widely used by economists and other social scientists. It had achieved widespread use in the mainstream press by the later half of the 1980s. Since its inception, the concept of globalization has inspired numerous competing definitions and interpretations.^[4]

The United Nations Building

The United Nations ESCWA has written that globalization "is a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour... although considerable barriers remain to the flow of labour... Globalization is not a new phenomenon. It began in the late nineteenth century, but its spread slowed during the period from the start of the First World War until the third quarter of the twentieth century. This slowdown can be attributed to the inwardlooking policies pursued by a number of countries in order to protect their respective industries... however, the pace of globalization picked up rapidly during the fourth quarter of the twentieth century..."^[5]

Saskia Sassen writes that "a good part of globalization consists of an enormous variety of micro-processes that begin to denationalize what had been constructed as national — whether policies, capital, political subjectivities, urban spaces, temporal frames, or any other of a variety of dynamics and domains."^[6]

Tom G. Palmer of the Cato Institute defines globalization as "the diminution or elimination of state-enforced restrictions on exchanges across borders and the increasingly integrated and complex global system of production and exchange that has emerged as a result."^[7]

Thomas L. Friedman has examined the impact of the "flattening" of the world, and argues that globalized trade, outsourcing, supply-chaining, and political forces have changed the world permanently, for both better and worse. He also argues that the pace of globalization is quickening and will continue to have a growing impact on business organization and practice.^[8]

HSBC is the largest bank in the world and operates across the globe.^[9][10]

Noam Chomsky argues that the word globalization is also used, in a doctrinal sense, to describe the neoliberal form of economic globalization.^[11]

Herman E. Daly argues that sometimes the terms internationalization and globalization are used interchangeably but there is a significant formal difference. The term "internationalization" (or internationalisation) refers to the importance of international trade, relations, treaties etc. owing to the (hypothetical) immobility of labor and capital between or among nations.^{[citation needed]}

Adrián Ravier of the Hayek Foundation summarize the globalization as such the process that arises spontaneously in the market and acts by developing a progressive international division of labour, eliminating restrictions on individual liberties, reducing transportation and communication costs, and increasingly integrating the individuals that compose the “great society.”^[12]

Finally, Takis Fotopoulos argues that globalisation is the result of systemic trends manifesting the market economy’s grow-or-die dynamic, following the rapid expansion of transnational corporations. Because these trends have not been offset effectively by counter-tendencies that could have emanated from trade-union action and other forms of political activity, the outcome has been globalisation. This is a multi-faceted and irreversible phenomenon within the system of the market economy and it is expressed as: economic globalisation, namely, the opening and deregulation of commodity, capital and labour markets which led to the present form of neoliberal globalisation; political globalisation, i.e., the emergence of a transnational elite and the phasing out of the all powerful-nation state of the statist period; cultural globalisation, i.e., the worldwide homogenisation of culture; ideological globalisation; technological globalisation; social globalisation.^[13]

History

The historical origins of globalization are the subject of on-going debate. Though some scholars situate the origins of globalization in the modern era, others regard it as a phenomenon with a long history.

Perhaps the most extreme proponent of a deep historical origin for globalization was Andre Gunder Frank, an economist associated with dependency theory. Frank argued that a form of globalization has been in existence since the rise of trade links between Sumer and the Indus Valley Civilization in the third millenium B.C.^[14] Critics of this idea point out that it rests upon an overly-broad definition of globalization.

Extent of the Silk Road

An early form of globalized economics and culture existed during the Hellenistic Age, when commercialized urban centers were focused around the axis of Greek culture over a wide range that stretched from India to Spain, with such cities as Alexandria, Athens, and Antioch at its center. Trade was widespread during that period, and it is the first time the idea of a Cosmopolitan culture (from Greek "Cosmopolis", meaning "world city") emerged.

Others have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian Empire, and the Han Dynasty. The increasing articulation of commercial links between these powers inspired the development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome.^[15]

The Islamic Golden Age was also an important early stage of globalization, when Jewish and Muslim traders and explorers established a sustained economy across the Old World resulting in a globalization of crops, trade, knowledge and technology. Globally significant crops such as sugar and cotton became widely cultivated across the Muslim world in this period, while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture.^[16]

The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China, greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as Marco Polo to journey successfully (and profitably) from one end of Eurasia to the other. The so-called Pax Mongolica of the thirteenth century had several other notable globalizing effects. It witnessed the creation of the first international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the newly-unified regions of Central Asia.^[17] These pre-modern phases of global or hemispheric exchange are sometimes known as archaic globalization. Up to the sixteenth century, however, even the largest systems of international exchange were limited to the Old World.

The Age of Discovery brought a broad change in globalization, being the first period in which Eurasia and Africa engaged in substantial cultural, material and biologic exchange with the New World.^[18] It begun in the late 15th century, when the two Kingdoms of the Iberian Peninsula - Portugal and Castile - sent the first exploratory voyages^[19] around the Horn of Africa and to the Americas, "discovered" in 1492 by Christopher Columbus. Shortly before the turn of the 16th century, Portuguese started establishing trading posts (factories) from Africa to Asia and Brazil, to deal with the trade of local products like gold, spices and timber, introducing an international business center under a royal monopoly, the House of India.^[20] Global integration continued with the European colonization of the Americas initiating the Columbian Exchange,^[21] the enormous widespread exchange of plants, animals, foods, human populations (including slaves), communicable diseases, and culture between the Eastern and Western hemispheres. It was one of the most significant global events concerning ecology, agriculture, and culture in history.

Colonial empires in 1800 (animated map, 1492 to present)

This phase is sometimes known as proto-globalization. It was characterized by the rise of maritime European empires, in the 16th and 17th centuries, first the Portuguese and Spanish Empires, and later the Dutch and British Empires. In the 17th century, globalization became also a private business phenomenon when chartered companies like British East India Company (founded in 1600), often described as the first multinational corporation, as well as the Dutch East India Company (founded in 1602) were established. Because of the large investment and financing needs and high risks involved in international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization.^{[citation needed]}

Great Britain grew rich in the 19th century as the first global economic superpower, because of its superior manufacturing technology and improved global communications such as steamships and railroads.

The 19th century witnessed the advent of globalization approaching its modern form. Industrialization allowed cheap production of household items using economies of scale, while rapid population growth created sustained demand for commodities. Globalization in this period was decisively shaped by nineteenth-century imperialism. After the Opium Wars and the completion of British conquest of India, vast populations of these regions became ready consumers of European exports. It was in this period that areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. Meanwhile, the conquest of new parts of the globe, notably sub-Saharan Africa, by Europeans yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies, and the United States.^{[citation needed]} Said John Maynard Keynes,^[22]

“

The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914.

”

The first phase of "modern globalization" began to break down at the beginning of the 20th century, with the first World War. The novelist VM Yeates criticised the financial forces of globalisation as a factor in creating World War I.^[23]The final death knell for this phase came during the gold standard crisis and Great Depression in the late 1920s and early 1930s.^{[citation needed]}

In the middle decades of the twentieth century globalization was largely driven by the global expansion of multinational corporations based in the United States and Europe, and worldwide exchange of new developments in science, technology and products, with most significant inventions of this time having their origins in the Western world according to Encyclopedia Britannica.^[24] Worldwide export of western culture went through the new mass media: film, radio and television and recorded music. Development and growth of international transport and telecommunication played a decisive role in modern globalization.

In late 2000s, much of the industrialized world entered into a deep recession.^[25] Some analysts say the world is going through a period of deglobalization after years of increasing economic integration.^[26][27] Up to 45% of global wealth had been destroyed by the global financial crisis in little less than a year and a half.^[28] China has recently become the world’s largest exporter surpassing Germany.^[29]

Modern globalization

Globalization, since World War II, is largely the result of planning by politicians to break down borders hampering trade to increase prosperity and interdependence thereby decreasing the chance of future war^{[citation needed]}. Their work led to the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the processes of globalization.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.

Since World War II, barriers to international trade have been considerably lowered through international agreements — GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included:

• Promotion of free trade:
  • elimination of tariffs; creation of free trade zones with small or no tariffs
  • Reduced transportation costs, especially resulting from development of containerization for ocean shipping.
  • Reduction or elimination of capital controls
  • Reduction, elimination, or harmonization of subsidies for local businesses
  • Creation of subsidies for global corporations
  • Harmonization of intellectual property laws across the majority of states, with more restrictions
  • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity, but largely without success.^[30]

The Uruguay Round (1986 to 1994)^[31] led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

World exports rose from 8.5% in 1970, to 16.2% of total gross world product in 2001.^[32]

Measuring globalization

Looking specifically at economic globalization, demonstrates that it can be measured in different ways. These center around the four main economic flows that characterize globalization:

• Goods and services, e.g., exports plus imports as a proportion of national income or per capita of population
• Labor/people, e.g., net migration rates; inward or outward migration flows, weighted by population
• Capital, e.g., inward or outward direct investment as a proportion of national income or per head of population
• Technology, e.g., international research & development flows; proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband)

As globalization is not only an economic phenomenon, a multivariate approach to measuring globalization is the recent index calculated by the Swiss think tank KOF. The index measures the three main dimensions of globalization: economic, social, and political. In addition to three indices measuring these dimensions, an overall index of globalization and sub-indices referring to actual economic flows, economic restrictions, data on personal contact, data on information flows, and data on cultural proximity is calculated. Data is available on a yearly basis for 122 countries, as detailed in Dreher, Gaston and Martens (2008).^[33] According to the index, the world's most globalized country is Belgium, followed by Austria, Sweden, the United Kingdom and the Netherlands. The least globalized countries according to the KOF-index are Haiti, Myanmar, the Central African Republic and Burundi.^[34]

A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the Netherlands, Canada and Denmark are the most globalized, while Indonesia, India and Iran are the least globalized among countries listed.

Effects of globalization

Globalization has various aspects which affect the world in several different ways such as:

• Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries. International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) in the 50 years since 1955.^[35] China’s trade with Africa rose seven-fold during 2000-07 alone.^[36][37]
• Financial - emergence of worldwide financial markets and better access to external financing for borrowers. By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily to support the expanded levels of trade and investment.^[38] As these worldwide structures grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidenced by the financial crisis of 2007–2009.^[39]

As of 2005-2007, the Port of Shanghai holds the title as the World's busiest port.^[40][41][42]

• Economic - realization of a global common market, based on the freedom of exchange of goods and capital. The interconnectedness of these markets, however meant that an economic collapse in any one given country could not be contained.^{[citation needed]}
• Political - some use "globalization" to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization.^[43] Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of The United States’ own economy, the People's Republic of China has experienced some tremendous growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power.^[44]
• Informational - increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.
• Language - the most popular language is Mandarin (845 million speakers) followed by Spanish (329 million speakers) and English (328 million speakers).^[45]
  • About 35% of the world's mail, telexes, and cables are in English.
  • Approximately 40% of the world's radio programs are in English.
  • About 50% of all Internet traffic uses English.^[46]
• Competition - Survival in the new global business market calls for improved productivity and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition.^[47]
• Ecological - the advent of global environmental challenges that might be solved with international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Since many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution. On the other hand, economic development historically required a "dirty" industrial stage, and it is argued that developing countries should not, via regulation, be prohibited from increasing their standard of living.

The construction of continental hotels is a major consequence of globalization process in affiliation with tourism and travel industry, Dariush Grand Hotel, Kish, Iran

• Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities which embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture". Some bemoan the resulting consumerism and loss of languages. Also see Transformation of culture.
  • Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood and, to a lesser extent, Bollywood movies). Some consider such "imported" culture a danger, since it may supplant the local culture, causing reduction in diversity or even assimilation. Others consider multiculturalism to promote peace and understanding between peoples. A third position gaining popuilarity is the notion that multiculturalism to a new form of monoculture in which no distinctions exist and everyone just shift between various lifestyles in terms of music, cloth and other aspects once more firmly attached to a single culture. Thusly not mere cultural assimilation as mentioned above but the obliteration of culture as we know it today.^[48][49]
  • Greater international travel and tourism. WHO estimates that up to 500,000 people are on planes at any one time.^[50] In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% as compared to 2007.^[51]
  • Greater immigration,^[52] including illegal immigration.^[53] The IOM estimates there are more than 200 million migrants around the world today.^[54] Newly available data show that remittance flows to developing countries reached $328 billion in 2008.^[55]
  • Spread of local consumer products (e.g., food) to other countries (often adapted to their culture).
  • Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or Television, leaving out a substantial segment of the Earth's population.
  • Worldwide sporting events such as FIFA World Cup and the Olympic Games.
  • Incorporation of multinational corporations in to new media. As the sponsors of the All-Blacks rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete.^[56]
• Social - development of the system of non-governmental organisations as main agents of global public policy, including humanitarian aid and developmental efforts.^[57]
• Technical
  • Development of a Global Information System, global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones
  • Increase in the number of standards applied globally; e.g., copyright laws, patents and world trade agreements.
• Legal/Ethical
  • The creation of the international criminal court and international justice movements.
  • Crime importation and raising awareness of global crime-fighting efforts and cooperation.
  • The emergence of Global administrative law.
• Religious
  • The spread and increased interrelations of various religious groups, ideas, and practices and their ideas of the meanings and values of particular spaces.^[58]

Cultural effects

Japanese McDonald's fast food as an evidence of corporate globalization and the integration of the same into different cultures.

Culture is defined as patterns of human activity and the symbols that give these activities significance. Culture is what people eat, how they dress, beliefs they hold, and activities they practice. Globalization has joined different cultures and made it into something different. As Erla Zwingle, from the National Geographic article titled “Globalization” states, “When cultures receive outside influences, they ignore some and adopt others, and then almost immediately start to transform them.”^[59]

One classic culture aspect is food. Someone in America can be eating Japanese noodles for lunch while someone in Sydney, Australia is eating classic Italian meatballs. India is known for its curry and exotic spices. France is known for its cheeses. America is known for its burgers and fries. McDonalds is an American company which is now a global enterprise with 31,000 locations worldwide. This company is just one example of food causing cultural influence on the global scale.

Another common practice brought about by globalization is Chinese symbol tattoos. These tattoos are popular with today’s younger generation despite the fact that, in China, tattoos are not thought of as cool.^[60] Also, the Westerners who get these tattoos often don't know what they mean,^[61] making this an example of cultural appropriation.

The internet breaks down cultural boundaries across the world by enabling easy, near-instantaneous communication between people anywhere in a variety of digital forms and media. The Internet is associated with the process of cultural globalization because it allows interaction and communication between people with very different lifestyles and from very different cultures. Photo sharing websites allow interaction even where language would otherwise be a barrier.

Negative effects

See also: Alter-globalization, Participatory economics, and Global Justice Movement

Globalization has been one of the most hotly debated topics in international economics over the past few years. Globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation.^[62] In the Midwestern United States, globalization has eaten away at its competitive edge in industry and agriculture, lowering the quality of life in locations that have not adapted to the change.^[63]

Globalization, the flow of information, goods, capital and people across political and geographic boundaries, has also helped to spread some of the deadliest infectious diseases known to humans.^[64] Modern modes of transportation allow more people and products to travel around the world at a faster pace, they also open the airways to the transcontinental movement of infectious disease vectors.^[65] One example of this occurring is AIDS/HIV.^[66]

Opportunities in richer countries drives talent away, leading to brain drains. Brain drain has cost the African continent over $4 billion in the employment of 150,000 expatriate professionals annually.^[67] Indian students going abroad for their higher studies costs India a foreign exchange outflow of $10 billion annually.^[68]

A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people possess more financial assets than the poorest 10% of the world's population, combined [5]. In 2001, 46.4% of people in sub-Saharan Africa were living in extreme poverty.^[69] Nearly half of all Indian children are undernourished.^[70]

The Worldwatch Institute said the booming economies of China and India are planetary powers that are shaping the global biosphere. In 2007, China has overtaken the United States as the world's biggest producer of CO2.^[71] At present rates, tropical rainforests in Indonesia would be logged out in 10 years, Papua New Guinea in 13 to 16 years.^[72] A major source of deforestation is the logging industry, driven spectacularly by China and Japan.^[73] Thriving economies such as China and India are quickly becoming large oil consumers.^[74][75] China has seen oil consumption grow by 8% yearly since 2002, doubling from 1996-2006.^[76] Crude oil prices in the last several years have steadily risen from about $25 a barrel in August 2003 to over $140 a barrel in July 2008.^[77] The State of the World 2006 report said the two countries' high economic growth hid a reality of severe pollution. The report states:

The world's ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan, Europe and the United States as well as the aspirations of the rest of the world in a sustainable way^[78]

Without more recycling, zinc could be used up by 2037, both indium and hafnium could run out by 2017, and terbium could be gone before 2012.^[79] It said that if China and India were to consume as much resources per capita as United States or Japan in 2030 together they would require a full planet Earth to meet their needs.^[80] In the longterm these effects can lead to increased conflict over dwindling resources^[81] and in the worst case a Malthusian catastrophe.

The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices.^[82] From 1950 to 1984, as the Green Revolution transformed agriculture around the world, grain production increased by over 250%.^[83] The world population has grown by about 4 billion since the beginning of the Green Revolution and most believe that, without the Revolution, there would be greater famine and malnutrition than the UN presently documents (approximately 850 million people suffering from chronic malnutrition in 2005).^[84][85]

It is becoming increasingly difficult to maintain food security in a world beset by a confluence of "peak" phenomena, namely peak oil, peak water, peak phosphorus, peak grain and peak fish. Growing populations, falling energy sources and food shortages will create the "perfect storm" by 2030, according to the UK government chief scientist. He said food reserves are at a 50-year low but the world requires 50% more energy, food and water by 2030.^[86][87] The world will have to produce 70% more food by 2050 to feed a projected extra 2.3 billion people and as incomes rise, the United Nations' Food and Agriculture Organisation (FAO) warned.^[88]

The United Nations Office on Drugs and Crime (UNODC) issued a report that the global drug trade generates more than $320 billion a year in revenues.^[89] Worldwide, the UN estimates there are more than 50 million regular users of heroin, cocaine and synthetic drugs.^[90] The international trade of endangered species is second only to drug trafficking.^[91] Traditional Chinese medicine often incorporates ingredients from all parts of plants, the leaf, stem, flower, root, and also ingredients from animals and minerals. The use of parts of endangered species (such as seahorses, rhinoceros horns, saiga antelope horns, and tiger bones and claws) has created controversy and resulted in a black market of poachers who hunt restricted animals.^[92][93]

Sweatshops

A maquila in Mexico

It can be said that globalization is the door that opens up an otherwise resource-poor country to the international market. Where a country has little material or physical product harvested or mined from its own soil, large corporations see an opportunity to take advantage of the “export poverty” of such a nation. Where the majority of the earliest occurrences of economic globalization are recorded as being the expansion of businesses and corporate growth, in many poorer nations globalization is actually the result of the foreign businesses investing in the country to take advantage of the lower wage rate: even though investing, by increasing the Capital Stock of the country, increases their wage rate.

One example used by anti-globalization protestors is the use of sweatshops by manufacturers. According to Global Exchange these “Sweat Shops” are widely used by sports shoe manufacturers and mentions one company in particular – Nike.^[94] There are factories set up in the poor countries where employees agree to work for low wages. Then if labour laws alter in those countries and stricter rules govern the manufacturing process the factories are closed down and relocated to other nations with more conservative, laissez-faire economic policies.^{[citation needed]}

There are several agencies that have been set up worldwide specifically designed to focus on anti-sweatshop campaigns and education of such. In the USA, the National Labor Committee has proposed a number of bills as part of the The Decent Working Conditions and Fair Competition Act, which have thus far failed in Congress. The legislation would legally require companies to respect human and worker rights by prohibiting the import, sale, or export of sweatshop goods.^[95]

Specifically, these core standards include no child labor, no forced labor, freedom of association, right to organize and bargain collectively, as well as the right to decent working conditions.^[96]

Tiziana Terranova has stated that globalization has brought a culture of "free labour". In a digital sense, it is where the individuals (contributing capital) exploits and eventually "exhausts the means through which labour can sustain itself". For example, in the area of digital media (animations, hosting chat rooms, designing games), where it is often less glamourous than it may sound. In the gaming industry, a Chinese Gold Market has been established.^[97]

Pro-globalization (globalism)

Supporters of free trade claim that it increases economic prosperity as well as opportunity, especially among developing nations, enhances civil liberties and leads to a more efficient allocation of resources. Economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. In general, this leads to lower prices, more employment, higher output and a higher standard of living for those in developing countries.^[98][99]

Dr. Francesco Stipo, Director of the USA Club of Rome suggests that “the world government should reflect the political and economic balances of world nations. A world confederation would not supersede the authority of the State governments but rather complement it, as both the States and the world authority would have power within their sphere of competence".^[100]

Proponents of laissez-faire capitalism, and some libertarians, say that higher degrees of political and economic freedom in the form of democracy and capitalism in the developed world are ends in themselves and also produce higher levels of material wealth. They see globalization as the beneficial spread of liberty and capitalism.^[98]

Supporters of democratic globalization are sometimes called pro-globalists. They believe that the first phase of globalization, which was market-oriented, should be followed by a phase of building global political institutions representing the will of world citizens. The difference from other globalists is that they do not define in advance any ideology to orient this will, but would leave it to the free choice of those citizens via a democratic process.^{[citation needed]}

Some, such as former Canadian Senator Douglas Roche, O.C., simply view globalization as inevitable and advocate creating institutions such as a directly-elected United Nations Parliamentary Assembly to exercise oversight over unelected international bodies.

Anti-globalization

Main article: Anti-globalization movement

See also: Alter-globalization, Participatory economics, and Global Justice Movement

The "anti-globalization movement" is a term used to describe the political group who oppose the neoliberal version of globalization, while criticisms of globalization are some of the reasons used to justify this group's stance.

"Anti-globalization" may also involve the process or actions taken by a state or its people in order to demonstrate its sovereignty and practice democratic decision-making. Anti-globalization may occur in order to maintain barriers to the international transfer of people, goods and beliefs, particularly free market deregulation, encouraged by organizations such as the International Monetary Fund or the World Trade Organization. Moreover, as Naomi Klein argues in her book No Logo anti-globalism can denote either a single social movement or an umbrella term that encompasses a number of separate social movements^[101] such as nationalists and socialists. In either case, participants stand in opposition to the unregulated political power of large, multi-national corporations, as the corporations exercise power through leveraging trade agreements which in some instances damage the democratic rights of citizens^{[citation needed]}, the environment particularly air quality index and rain forests^{[citation needed]}, as well as national government's sovereignty to determine labor rights,^{[citation needed]} including the right to form a union, and health and safety legislation, or laws as they may otherwise infringe on cultural practices and traditions of developing countries.^{[citation needed]}

Some people who are labeled "anti-globalist" or "sceptics" (Hirst and Thompson)^[102] consider the term to be too vague and inaccurate.^[103][104] Podobnik states that "the vast majority of groups that participate in these protests draw on international networks of support, and they generally call for forms of globalization that enhance democratic representation, human rights, and egalitarianism."

Joseph Stiglitz and Andrew Charlton write:^[105]

“

The anti-globalization movement developed in opposition to the perceived negative aspects of globalization. The term 'anti-globalization' is in many ways a misnomer, since the group represents a wide range of interests and issues and many of the people involved in the anti-globalization movement do support closer ties between the various peoples and cultures of the world through, for example, aid, assistance for refugees, and global environmental issues.

”

Some members aligned with this viewpoint prefer instead to describe themselves as the "Global Justice Movement", the "Anti-Corporate-Globalization Movement", the "Movement of Movements" (a popular term in Italy), the "Alter-globalization" movement (popular in France), the "Counter-Globalization" movement, and a number of other terms.

Critiques of the current wave of economic globalization typically look at both the damage to the planet, in terms of the perceived unsustainable harm done to the biosphere, as well as the perceived human costs, such as poverty, inequality, miscegenation, injustice and the erosion of traditional culture which, the critics contend, all occur as a result of the economic transformations related to globalization. They challenge directly the metrics, such as GDP, used to measure progress promulgated by institutions such as the World Bank, and look to other measures, such as the Happy Planet Index,^[106] created by the New Economics Foundation.^[107] They point to a "multitude of interconnected fatal consequences–social disintegration, a breakdown of democracy, more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and alienation"^[108] which they claim are the unintended but very real consequences of globalization.

The terms globalization and anti-globalization are used in various ways. Noam Chomsky believes that^[109][110]

“

The term "globalization" has been appropriated by the powerful to refer to a specific form of international economic integration, one based on investor rights, with the interests of people incidental. That is why the business press, in its more honest moments, refers to the "free trade agreements" as "free investment agreements" (Wall St. Journal). Accordingly, advocates of other forms of globalization are described as "anti-globalization"; and some, unfortunately, even accept this term, though it is a term of propaganda that should be dismissed with ridicule. No sane person is opposed to globalization, that is, international integration. Surely not the left and the workers movements, which were founded on the principle of international solidarity — that is, globalization in a form that attends to the rights of people, not private power systems.

”

“

The dominant propaganda systems have appropriated the term "globalization" to refer to the specific version of international economic integration that they favor, which privileges the rights of investors and lenders, those of people being incidental. In accord with this usage, those who favor a different form of international integration, which privileges the rights of human beings, become "anti-globalist." This is simply vulgar propaganda, like the term "anti-Soviet" used by the most disgusting commissars to refer to dissidents. It is not only vulgar, but idiotic. Take the World Social Forum, called "anti-globalization" in the propaganda system – which happens to include the media, the educated classes, etc., with rare exceptions. The WSF is a paradigm example of globalization. It is a gathering of huge numbers of people from all over the world, from just about every corner of life one can think of, apart from the extremely narrow highly privileged elites who meet at the competing World Economic Forum, and are called "pro-globalization" by the propaganda system. An observer watching this farce from Mars would collapse in hysterical laughter at the antics of the educated classes.

”

Critics argue that:

• Poorer countries suffering disadvantages: While it is true that globalization encourages free trade among countries, there are also negative consequences because some countries try to save their national markets. The main export of poorer countries is usually agricultural goods. Larger countries often subsidise their farmers (like the EU Common Agricultural Policy), which lowers the market price for the poor farmer's crops compared to what it would be under free trade.^[111]
• Exploitation of foreign impoverished workers: The deterioration of protections for weaker nations by stronger industrialized powers has resulted in the exploitation of the people in those nations to become cheap labor. Due to the lack of protections, companies from powerful industrialized nations are able to offer workers enough salary to entice them to endure extremely long hours and unsafe working conditions, though economists question if consenting workers in a competitive employers' market can be decried as "exploited". It is true that the workers are free to leave their jobs, but in many poorer countries, this would mean starvation for the worker, and possible even his/her family if their previous jobs were unavailable.^[112]
• The shift to outsourcing: The low cost of offshore workers have enticed corporations to buy goods and services from foreign countries. The laid off manufacturing sector workers are forced into the service sector where wages and benefits are low, but turnover is high .^{[citation needed]} This has contributed to the deterioration of the middle class^{[citation needed]} which is a major factor in the increasing economic inequality in the United States .^{[citation needed]} Families that were once part of the middle class are forced into lower positions by massive layoffs and outsourcing to another country. This also means that people in the lower class have a much harder time climbing out of poverty because of the absence of the middle class as a stepping stone.^[113]
• Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition has caused a weakening of labor unions in the United States. Unions lose their effectiveness when their membership begins to decline. As a result unions hold less power over corporations that are able to easily replace workers, often for lower wages, and have the option to not offer unionized jobs anymore.^[111]
• Increase exploitation of child labor: for example, a country that experiencing increases in labor demand because of globalization and an increase the demand for goods produced by children, will experience greater a demand for child labor. This can be "hazardous" or “exploitive”, e.g., quarrying, salvage, cash cropping but also includes the trafficking of children, children in bondage or forced labor, prostitution, pornography and other illicit activities.^[114]

In December 2007, World Bank economist Branko Milanovic has called much previous empirical research on global poverty and inequality into question because, according to him, improved estimates of purchasing power parity indicate that developing countries are worse off than previously believed. Milanovic remarks that "literally hundreds of scholarly papers on convergence or divergence of countries’ incomes have been published in the last decade based on what we know now were faulty numbers." With the new data, possibly economists will revise calculations, and he also believed that there are considerable implications estimates of global inequality and poverty levels. Global inequality was estimated at around 65 Gini points, whereas the new numbers indicate global inequality to be at 70 on the Gini scale.^[115] It is unsurprising that the level of international inequality is so high, as larger sample spaces almost always give a higher level of inequality.

The critics of globalization typically emphasize that globalization is a process that is mediated according to corporate interests, and typically raise the possibility of alternative global institutions and policies, which they believe address the moral claims of poor and working classes throughout the globe, as well as environmental concerns in a more equitable way.^[116]

The movement is very broad^{[citation needed]}, including church groups, national liberation factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization and others. Some are reformist, (arguing for a more moderate form of capitalism) while others are more revolutionary (arguing for what they believe is a more humane system than capitalism) and others are reactionary, believing globalization destroys national industry and jobs.

One of the key points made by critics of recent economic globalization is that income inequality, both between and within nations, is increasing as a result of these processes. One article from 2001 found that significantly, in 7 out of 8 metrics, income inequality has increased in the twenty years ending 2001. Also, "incomes in the lower deciles of world income distribution have probably fallen absolutely since the 1980s". Furthermore, the World Bank's figures on absolute poverty were challenged. The article was skeptical of the World Bank's claim that the number of people living on less than $1 a day has held steady at 1.2 billion from 1987 to 1998, because of biased methodology.^[117]

A chart that gave the inequality a very visible and comprehensible form, the so-called 'champagne glass' effect,^[118] was contained in the 1992 United Nations Development Program Report, which showed the distribution of global income to be very uneven, with the richest 20% of the world's population controlling 82.7% of the world's income.^[119]

Distribution of world GDP, 1989

Quintile of Population	Income
Richest 20%	82.7%
Second 20%	11.7%
Third 20%	2.3%
Fourth 20%	2.4%
Poorest 20%	0.2%

Source: United Nations Development Program. 1992 Human Development Report^[120]

Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.^[121]

Americanization related to a period of high political American clout and of significant growth of America's shops, markets and object being brought into other countries. So globalization, a much more diversified phenomenon, relates to a multilateral political world and to the increase of objects, markets and so on into each others countries.

Critics of globalization talk of Westernization. A 2005 UNESCO report^[122] showed that cultural exchange is becoming more frequent from Eastern Asia but . In 2002, China was the third largest exporter of cultural goods, after the UK and US. Between 1994 and 2002, both North America's and the European Union's shares of cultural exports declined, while Asia's cultural exports grew to surpass North America. Related factors are the fact that Asia's population and area are several times that of North America.

Some opponents of globalization see the phenomenon as the promotion of corporatist interests.^[123] They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.^[124][125]

International Social Forums

See main articles: European Social Forum, the Asian Social Forum,(Africa Social Forum), World Social Forum (WSF).

The first WSF in 2001 was an initiative of the administration of Porto Alegre in Brazil. The slogan of the World Social Forum was "Another World Is Possible". It was here that the WSF's Charter of Principles was adopted to provide a framework for the forums.

The WSF became a periodic meeting: in 2002 and 2003 it was held again in Porto Alegre and became a rallying point for worldwide protest against the American invasion of Iraq. In 2004 it was moved to Mumbai (formerly known as Bombay, in India), to make it more accessible to the populations of Asia and Africa. This last appointment saw the participation of 75,000 delegates.

In the meantime, regional forums took place following the example of the WSF, adopting its Charter of Principles. The first European Social Forum (ESF) was held in November 2002 in Florence. The slogan was "Against the war, against racism and against neo-liberalism". It saw the participation of 60,000 delegates and ended with a huge demonstration against the war (1,000,000 people according to the organizers). The other two ESFs took place in Paris and London, in 2003 and 2004 respectively.

Recently there has been some discussion behind the movement about the role of the social forums. Some see them as a "popular university", an occasion to make many people aware of the problems of globalization. Others would prefer that delegates concentrate their efforts on the coordination and organization of the movement and on the planning of new campaigns. However it has often been argued that in the dominated countries (most of the world) the WSF is little more than an 'NGO fair' driven by Northern NGOs and donors most of which are hostile to popular movements of the poor.^[126]

See also

• Alter-globalization
• American Imperialism
• Archaic globalization
• Columbian Exchange
• Cultural assimilation
• Deglobalization
• Development criticism
• Globalism
• Global information system
• Globality
• Great Transition
• Interdependence
• New world order (politics)
• Postmodernism
• Transnational cinema

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Further reading

• Barbara, Christopher (2008). International legal personality: Panacea or pandemonium? Theorizing about the individual and the state in the era of globalization. Saarbrücken: Verlag Dr. Müller. ISBN 3639115147. http://www.amazon.com/International-legal-personality-pandemonium-globalization/dp/3639115147/ref=sr_1_2?ie=UTF8&s=books&qid=1230743211&sr=1-2. 
• Barzilai, Gad (2008). Beyond Relativism: Where is Political Power in Legal Pluralism. The Berkeley Electronic Press. pp. 395–416. http://www.bepress.com/til/default/vol9/iss2/art4/. 
• Bastardas-Boada, Albert (2002), “World Language Policy in the Era of Globalization: Diversity and Intercommunication from the Perspective of 'Complexity'", Noves SL, Revista de Sociolingüística (Barcelona), http://www6.gencat.net/llengcat/noves/hm02estiu/metodologia/a_bastardas1_9.htm.
• von Braun, Joachim; Eugenio Diaz-Bonilla (2007). Globalization of Food and Agriculture and the Poor. Oxford: Oxford University Press. ISBN 9780195695281. http://www.ifpri.org/PUBS/otherpubs/globalpoor.asp. 
• Peter Berger, Four Faces of Global Culture (The National Interest, Fall 1997).
• Friedman, Thomas L. (2005). The World Is Flat. New York: Farrar, Straus and Giroux. ISBN 0-374-29288-4. 
• Grinin, Leonid. Globalization and Sovereignty: Why do States Abandon their Sovereign Prerogatives?. http://old.uchitel-izd.ru/index.php?option=content&task=view&id=155&Itemid=97. 
• Haggblade, Steven; et al. (2007). Transforming the Rural Nonfarm Economy: Opportunities and Threats in the Developing World. Johns Hopkins University Press. pp. 512. ISBN 978-0-8018-8663-8. http://www.ifpri.org/pubs/jhu/transformrural.asp. 
• Kitching, Gavin (2001). Seeking Social Justice through Globalization. Escaping a Nationalist Perspective. Penn State Press. ISBN 0271021624. http://www.gavinkitching.com/africa_3.htm. 
• Gernot Kohler and Emilio José Chaves (Editors) “Globalization: Critical Perspectives” Haupauge, New York: Nova Science Publishers (http://www.novapublishers.com/) ISBN 1-59033-346-2. With contributions by Samir Amin, Christopher Chase Dunn, Andre Gunder Frank, Immanuel Wallerstein
• Mander, Jerry; Edward Goldsmith (1996). The case against the global economy : and for a turn toward the local. San Francisco: Sierra Club Books. ISBN 0-87156-865-9. 
• Moore, Karl; David Lewis (2009). Origins of Globalization. New York: Routledge. 
• Murray, Warwick E. (2006). Geographies of Globalization. New York: Routledge/Taylor and Francis. ISBN 0415317991. 
• Osterhammel, Jurgen; Niels P. Petersson (2005). Globalization: A Short History. Princeton, NJ: Princeton University Press. ISBN 0-691-12165-6. http://www.amazon.com/Globalization-Short-History-Jurgen-Osterhammel/dp/0691121656/ref=sr_1_1?ie=UTF8&s=books&qid=1238939576&sr=1-1. 
• Raffaele Feola, La Globalizzazione dell'Arte. L'UTOPIA DEL GLOBALE, Napoli 2009.
• Reinsdorf, Marshall and Matthew J. Slaughter (2009). International Trade in Services and Intangibles in the Era of Globalization. Chicago: The University of Chicago Press. ISBN 9780226709598. 
• Sen, Amartya (1999). Development as Freedom. Oxford, New York: Oxford University Press. ISBN 019289330. 
• Sirkin, Harold L; James W. Hemerling and Arindam K. Bhattacharya (2008). Globality: Competing with Everyone from Everywhere for Everything. New York: Business Plus. pp. 292. ISBN 0446178292. http://www.bcg.com/globality. 
• Smith, Charles (2007). International Trade and Globalisation, 3rd edition. Stocksfield: Anforme. ISBN 1905504101. 
• Steger, Manfred (2002). Globalism: the new market ideology. Lanham, MD: Rowman & Littlefield Publishers. ISBN 0742500721. 
• Steger, Manfred (2003). Globalization: A Very Short Introduction. Oxford, New York: Oxford University Press. ISBN 0-19-280359-X. 
• Stiglitz, Joseph E. (2002). Globalization and Its Discontents. New York: W.W. Norton. ISBN 0-393-32439-7. 
• Stiglitz, Joseph E. (2006). Making Globalization Work. New York: W.W. Norton. ISBN 0-393-06122-1. 
• Tausch, Arno (2008). Multicultural Europe: Effects of the Global Lisbon Process. Hauppauge, NY: Nova Science Publishers. ISBN 978-1-60456-806-6. https://www.novapublishers.com/catalog/product_info.php?products_id=7489. 
• Tausch, Arno (2009). Titanic 2010? The European Union and its failed “Lisbon strategy. Hauppauge, NY: Nova Science Publishers. ISBN 978-1-60741-826-9. https://www.novapublishers.com/catalog/product_info.php?products_id=8314. 
• Wolf, Martin (2004). Why Globalization Works. New Haven: Yale University Press. ISBN 978-0300102529. 

External links

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Wikiquote has a collection of quotations related to: Globalization

Look up globalisation or globalization in Wiktionary, the free dictionary.

Wikimedia Commons has media related to: Globalization

• YaleGlobal Online Online Magazine focusing on Globalization
• Latin Business Chronicle, Dec.10, 2008 Latin America More Globalized
• Argentine Center of International Studies
• Arno Tausch (2006), ‘From the “Washington” towards a “Vienna Consensus”? A quantitative analysis on globalization, development and global governance’. Paper, prepared for the discussion process leading up to the EU-Latin America and Caribbean Summit 2006, May 11, 2006 to May 12, 2006, Vienna, Austria. Centro Argentino de Estudios Internacionales, Buenos Aires
• Arno Tausch (2007), ‘“Destructive Creation”? Some long-term Schumpeterian reflections on the Lisbon process’ Entelequia e-Books, University of Cadiz/Malaga (Spain), Munich Personal Repec Archive, Global Development Network, University of Sussex and University of Connecticut, Ideas/Repec
• Effects of globalization on online freelancers
• Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy a speech by Federal Reserve chairman Ben Bernanke
• Globalisation shakes the world BBC News
• Inequality Project from University of Texas
• Institute for Research on World-Systems at UC Riverside
• Resilience, Panarchy, and World-Systems Analysis from the Ecology and Society Journal
• Rethinking Globalisation blog
• OECD Globalization statistics
• Globalization theories
• The Sociology of Globalization
• Mapping Globalization — globalization project with a collection of maps
• Globalization and Me Views and viewpoints on Globalization
• Globalism/Antiglobalism : a survey and a view

Multimedia

• CBC Archives CBC Television reports on the opening of Moscow McDonalds (1990) - sample of Western business expanding into former communist countries.
• Squeezed: The Cost of Free Trade in the Asia-Pacific 2007 film about the impacts of globalisation in Thailand and the Philippines.

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