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Globalization (or globalisation) in its literal sense is the process of making, transformation of some things or phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, sociocultural and political forces. Globalization is very often used to refer to economic globalization, that is integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.
Thomas L. Friedman "examines the impact of the 'flattening' of the globe", 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.
Noam Chomsky argues that the word globalization is also used, in a doctrinal sense, to describe the neoliberal form of economic globalization.
Herman E. Daly argues that sometimes the terms internationalization and globalization are used interchangeably but there is a slight formal difference. The term "internationalization" refers to the importance of international trade, relations, treaties etc. International means between or among nations. "Globalization" means erasure of national boundaries for economic purposes; international trade (governed by comparative advantage) becomes interregional trade (governed by absolute advantage).
The word "Globalization" has been used by economists since the 1980's; however, its concepts did not become popular until the later half of the 1980s and 1990's. The earliest written theoretical concepts of globalization were penned by an American entrepreneur-turned-minister Charles Taze Russell who coined the term 'corporate giants' in 1897.
Globalization in its largest extent began a bit before the turn of the 16th century, in Portugal. The country's global explorations in the 16th century linked continents, economies and cultures as never before. The Kingdom of Portugal kicked off what has come to be known as the Age of Discovery, in the mid-1400s. The western-most country in Europe, it was the first to significantly probe the Atlantic Ocean, colonizing the Azores, Madeira and other Atlantic islands, then braving the west coast of Africa. In 1488, Portuguese explorer Bartolomeu Dias was the first to sail around the southern tip of Africa, and in 1498 his countryman Vasco da Gama repeated the experiment, making it as far as India. In 1500, Pedro Álvares Cabral discovered Brazil. The Portuguese Empire would establish ports, forts and trading posts as far west as Brazil, as far east as Japan and Timor, and along the coasts of Africa, India and China. For the first time in history, a wave of global trade, colonization, and enculturation reached all corners of the world.
Globalization is viewed as a centuries long process, tracking the expansion of human population and the growth of civilization, that has accelerated dramatically in the past 50 years. Early forms of globalization existed during the Roman Empire, the Parthian empire, and the Han Dynasty, when the silk road started in China, reached the boundaries of the Parthian empire, and continued onwards towards Rome. The Islamic Golden Age is also an example, when Muslim traders and explorers established an early global economy across the Old World resulting in a globalization of crops, trade, knowledge and technology; and later during the Mongol Empire, when there was greater integration along the Silk Road. Global integration continued through the expansion of European trade, as in the 16th and 17th centuries, when the Portuguese and Spanish Empires reached to all corners of the world after expanding to the Americas. Globalization has had a tremendous impact on cultures, particularly indigenous cultures, around the world.
In the 17th century, Globalization became a business phenomenon when the Dutch East India Company, which is often described as the first multinational corporation, was established. Because of the high risks involved with international trade, the Dutch East India Company became the first company in the world to share risk and enable joint ownership through the issuing of shares: an important driver for globalization.
In the 19th century it was sometimes called "The First Era of Globalization" a period characterized by rapid growth in international trade and investment, between the European imperial powers, their colonies, and, later, the United States. It was in this period that areas of sub-saharan Africa and the Island Pacific were incorporated into the world system. The "First Era of Globalization" began to break down at the beginning with the first World War, and later collapsed during the gold standard crisis in the late 1920s and early 1930s.
Globalization in the era since World War II was first the result of planning by economists, business interests, and politicians who recognized the costs associated with protectionism and declining international economic integration. Their work led to the Bretton Woods conference and the founding of several international institutions intended to oversee the renewed processes of globalization, promoting growth and managing adverse consequences.
These were the International Bank for Reconstruction and Development (the World Bank) and the International Monetary Fund. It has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of 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 - General Agreement on Tariffs and Trade (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:
- Reduction or elimination of tariffs; construction of free trade zones with small or no tariffs
- Reduced transportation costs, especially from development of containerization for ocean shipping.
- Reduction or elimination of capital controls
- Reduction, elimination, or harmonization of subsidies for local businesses
- Restriction of free trade:
- 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)
The Uruguay Round (1984 to 1995) led to a treaty to create the World Trade Organization (WTO), to mediate trade disputes and set up a uniform platform of trading. Other bi- 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% of gross world product in 1970 to 16.1% of gross world product in 2001.
The use of the term globalization (in the doctrinal sense), in the context of these developments has been analysed by many including Noam Chomsky who states
|“||... That enhances what's called "globalization," a term of propaganda used conventionally to refer to a certain particular form of international integration that is (not surprisingly) beneficial to its designers: Multinational corporations and the powerful states to which they are closely linked.||”|
Critics have observed that the term's contemporary usage comprises several meanings, for example Noam Chomsky states that:
|“||The term "globalization," like most terms of public discourse, has two meanings: its literal meaning, and a technical sense used for doctrinal purposes. In its literal sense, "globalization" means international integration. Its strongest proponents since its origins have been the workers movements and the left (which is why unions are called "internationals"), and the strongest proponents today are those who meet annually in the World Social Forum and its many regional offshoots. In the technical sense defined by the powerful, they are described as "anti-globalization," which means that they favour globalization directed to the needs and concerns of people, not investors, financial institutions and other sectors of power, with the interests of people incidental. That's "globalization" in the technical doctrinal sense.||”|
Looking specifically at economic globalization, it can be measured in different ways. These centre 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). 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. Other measures conceptualize Globalization as diffusion and develop interactive procedure to capture the degree of its impact Jahn 2006.
A.T. Kearney and Foreign Policy Magazine jointly publish another Globalization Index. According to the 2006 index, Singapore, Ireland, Switzerland, the U.S., the Netherlands, Canada and Denmark are the most globalized, while Egypt, 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 (alias trans nationalization) - 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 transnational corporations, and access to goods by wealthier nations and individuals at the expense of poorer nations and individuals who supply the labour.
- Financial - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers. Simultaneous though not necessarily purely globalist is the emergence of under or un-regulated foreign exchange and speculative markets leading to inflated wealth of investors and artificial inflation of commodities, goods, and in some instances entire nations as with the Asian economic boom-bust that was brought on externally by "free" trade.
- Economic - realization of a global common market, based on the freedom of exchange of goods and capital.
- Political - political globalization is the creation of a world government which regulates the relationships among nations and guarantees the rights arising from social and economic globalization. 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. The European Union, Russian Federation and India are among the other already-established world powers which may have the ability to influence future world politics.
- 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 telephony and Internet, possibly ancillary or unrelated to the globalist ideology.
- Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities such as Globalism - which embodies cultural diffusion, the desire to consume and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture"; loss of languages (and corresponding loss of ideas), also see Transformation of culture
- Ecological- the advent of global environmental challenges that can not be solved without international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Many factories are built in developing countries where they can pollute freely. Globalism and free trade interplay to increase pollution and accelerate it in the name of an ever expanding capitalist growth economy in a non-expanding world. The detriment is again to the poorer nations while the benefit is allocated to the wealthier nations.
- Social - increased circulation by people of all nations with fewer restrictions. Provided that the people of those nations are wealthy enough to afford international travel, which the majority of the world's population is not. An illusory 'benefit' recognized by the elite and wealthy, and increasingly so as fuel and transport costs rise.
- Transportation - fewer and fewer European cars on European roads each year (the same can also be said about American cars on American roads) and the death of distance through the incorporation of technology to decrease travel time. This would appear to be a technological advancement recognized by those who work in information, rather than labour intensive markets, accessible to the few rather than the many, and if it is indeed an effect of globalism, reflects the disproportionate inequitable allocation of resources rather than a benefit to humanity overall.
- International cultural exchange
- Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood and Bollywood movies). However, the imported culture can easily supplant the local culture, causing reduction in diversity through hybridization or even assimilation. The most prominent form of this is Westernization, but Sinicization of cultures has taken place over most of Asia for many centuries. Arguably the hegemonic efects of globalism and homogenization of culture as the capitalist globalist economy becomes the "only" way that countries may participate through the IMF and World Bank leads to a destruction rather than an appreciation of differences in culture.
- Greater international travel and tourism for the few who can afford international travel and tourism.
- Greater immigration, including illegal immigration, except for those countries around the world including the UK, Canada, and the United States who have in 2008 accelerated removal of illegal migrants and modified laws to increase the ease of removing those who have entered the country illegally, while ensuring that immigration policies allow those more favourable to the stimulation of economy to enter, primarily focusing on the capital that immigrants can move into a country with them.
- Spread of local consumer products (e.g. food) to other countries (often adapted to their culture) including genetically modified organisms. A new and novel feature of the globalist growth economy is the birth of the licensed seed which will only be viable for one season and can not be replanted in a subsequent season - ensuring a captive market to a corporation. Entire nations may have their food supply controlled by a company successful in implementing such GMOs potentially through World Bank or IMF loan conditions.
- World-wide 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.
- World-wide sporting events such as FIFA World Cup and the Olympic Games.
- Formation or development of a set of universal values - Homogenization of Culture
- Development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fibre optic cable, and wireless telephones
- Increase in the number of standards applied globally; e.g. copyright laws, patents and world trade agreements.
- The creation of the international criminal court, which the United States has refused to sign on to, and international justice movements.
- Crime importation and raising awareness of global crime-fighting efforts and cooperation.
- Sexual awareness – It is often easy to only focus on the economic aspects of Globalization. This term also has strong social meanings behind it. Globalization can also mean a cultural interaction between different countries. Globalization may also have social effects such changes in sexual inequality, and to this issue brought about a greater awareness of the different (often more brutal) types of gender discrimination throughout the world. For example, Women and girls in African countries have long been subjected to female circumcision- such a harmful procedure has been since exposed to the world, and the practice is now decreasing in occurrence.
- Increasing concentration of wealth in fewer and fewer hands. Media and other multinational mergers leading to fewer corporations controlling vaster segments of society and production. The decrease in the middle class, and the increase in poverty observed within Globalized and deregulated nations. Globalization was responsible for the largest sovereign debt default in world history, bankrupting the entire nation of Argentina in 2002. Globalization did, however, benefit business and finance in that large corporations and multinational banks were able to move over $40BN in cash out of Argentina literally in the dead of night as there were no regulations in this deregulated and globalized country to prevent them from doing so. Opponents of Globalization argue that the banks locking the citizens out of their own accounts, the 60% and above unemployment rate, and the bankruptcy of an entire nation are arguments against globalization.
Generally, support of Free Trade, Capitalism, and Democracy - systems which are widely believed to facilitate Globalization. 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.
One of the ironies of the recent success of India and China is the fear that... success in these two countries comes at the expense of the United States. These fears are fundamentally wrong and, even worse, dangerous. They are wrong because the world is not a zero-sum struggle... but rather is a positive-sum opportunity in which improving technologies and skills can raise living standards around the world.— Jeffrey D. Sachs, The End of Poverty, 2005
Libertarians and proponents of laissez-faire capitalism 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.
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.
Some, such as 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.
Supporters of globalization argue that the anti-globalization movement uses anecdotal evidence to support their protectionist view, whereas worldwide statistics strongly support globalization:
- From 1981 to 2001, according to World Bank figures, the number of people living on $1 a day or less declined from 1.5 billion to 1.1 billion in absolute terms. At the same time, the world population increased, so in percentage terms the number of such people in developing nations declined from 40% to 20% of the population. with the greatest improvements occurring in economies rapidly reducing barriers to trade and investment; yet, some critics argue that more detailed variables measuring poverty should be studied instead .
- The percentage of people living on less than $2 a day has decreased greatly in areas effected by globalization, whereas poverty rates in other areas have remained largely stagnant. In East-Asia, including China, the percentage has decreased by 50.1% compared to a 2.2% increase in Sub-Saharan Africa.
|Area||Demographic||1981||1984||1987||1990||1993||1996||1999||2002||Percentage Change 1981-2002|
|East Asia and Pacific||Less than $1 a day||57.7%||38.9%||28.0%||29.6%||24.9%||16.6%||15.7%||11.1%||-80.76%|
|Less than $2 a day||84.8%||76.6%||67.7%||69.9%||64.8%||53.3%||50.3%||40.7%||-52.00%|
|Latin America||Less than $1 a day||9.7%||11.8%||10.9%||11.3%||11.3%||10.7%||10.5%||8.9%||-8.25%|
|Less than $2 a day||29.6%||30.4%||27.8%||28.4%||29.5%||24.1%||25.1%||23.4%||-29.94%|
|Sub-Saharan Africa||Less than $1 a day||41.6%||46.3%||46.8%||44.6%||44.0%||45.6%||45.7%||44.0%||+5.77%|
|Less than $2 a day||73.3%||76.1%||76.1%||75.0%||74.6%||75.1%||76.1%||74.9%||+2.18%|
'SOURCE: World Bank, Poverty Estimates, 2002
- Income inequality for the world as a whole is diminishing. Due to definitional issues and data availability, there is disagreement with regards to the pace of the decline in extreme poverty. As noted below, there are others disputing this. The economist Xavier Sala-i-Martin in a 2007 analysis argues that this is incorrect, income inequality for the world as a whole has diminished. . Regardless of who is right about the past trend in income inequality, it has been argued that improving absolute poverty is more important than relative inequality.
- Life expectancy has almost doubled in the developing world since World War II and is starting to close the gap between itself and the developed world where the improvement has been smaller. Even in Sub-Saharan Africa, the least developed region, life expectancy increased from 30 years before World War II to about a peak of about 50 years before the AIDS pandemic and other diseases started to force it down to the current level of 47 years. Infant mortality has decreased in every developing region of the world.
- Democracy has increased dramatically from there being almost no nations with universal suffrage in 1900 to 62.5% of all nations having it in 2000.
- Feminism has made advances in areas such as Bangladesh through providing women with jobs and economic safety.
- The proportion of the world's population living in countries where per-capita food supplies are less than 2,200 calories (9,200 kilojoules) per day decreased from 56% in the mid-1960s to below 10% by the 1990s.
- Between 1950 and 1999, global literacy increased from 52% to 81% of the world. Women made up much of the gap: female literacy as a percentage of male literacy has increased from 59% in 1970 to 80% in 2000.
- The percentage of children in the labor force has fallen from 24% in 1960 to 10% in 2000.
- There are similar increasing trends toward electric power, cars, radios, and telephones per capita, as well as a growing proportion of the population with access to clean water.
- The book The Improving State of the World also finds evidence for that these, and other, measures of human well-being has improved and that globalization is part of the explanation. It also responds to arguments that environmental impact will limit the progress.
Although critics of globalization complain of Westernization, a 2005 UNESCO report showed that cultural exchange is becoming mutual. 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.
Anti-globalization is a pejorative term used to describe the political stance of people and groups who oppose the neoliberal version of globalization.
“Anti-globalization" may involve the process or actions taken by a state in order to demonstrate its sovereignty and practice democratic decision-making. Anti-globalization may occur in order to put brakes on the international transfer of people, goods and ideology, particularly those determined by the organizations such as the IMF or the WTO in imposing the radical deregulation program of free market fundamentalism on local governments and populations. Moreover, as Canadian journalist Naomi Klein argues in her book No Logo: Taking Aim at the Brand Bullies (also subtitled No Space, No Choice, No Jobs) anti-globalism can denote either a single social movement or an umbrella term that encompasses a number of separate social movements 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 damage in some instances the democratic rights of citizens, the environment particularly air quality index and rain forests, as well as national governments sovereignty to determine labor rights including the right to unionize for better pay, and better working conditions, or laws as they may otherwise infringe on cultural practices and traditions of developing countries.
Most people who are labeled "anti-globalization" consider the term to be too vague and inaccurate 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:
|“||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.||”|
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 increased 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, created by the New Economics Foundation. 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" 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 states that
|“||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 favour 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 are sometimes at disadvantage: While it is true that globalization encourages free trade among countries on an international level, there are also negative consequences because some countries try to save their national markets. The main export of poorer countries is usually agricultural goods. It is difficult for these countries to compete with stronger countries that subsidize their own farmers. Because the farmers in the poorer countries cannot compete, they are forced to sell their crops at much lower price than what the market is paying.
- 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. The abundance of cheap labor is giving the countries in power incentive not to rectify the inequality between nations. If these nations developed into industrialized nations, the army of cheap labor would slowly disappear alongside development. With the world in this current state, it is impossible for the exploited workers to escape poverty. 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.
- The shift to service work: The low cost of offshore workers have enticed corporations to move production to foreign countries. The laid off unskilled workers are forced into the service sector where wages and benefits are low, but turnover is high. This has contributed to the widening economic gap between skilled and unskilled workers. The loss of these jobs has also contributed greatly to the slow decline of the middle class which is a major factor in the increasing economic inequality in the United States. 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.
- 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.
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, economists will revise calculations and possibly reach new conclusions" moreover noting that "implications for the estimates of global inequality and poverty are enormous. The new numbers show global inequality to be significantly greater than even the most pessimistic authors had thought. Until the last month, global inequality, or difference in real incomes between all individuals of the world, was estimated at around 65 Gini points – with 100 denoting complete inequality and 0 denoting total equality, with everybody’s income the same – a level of inequality somewhat higher than that of South Africa. But the new numbers show global inequality to be 70 Gini points – a level of inequality never recorded anywhere."
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.
The movement is very broad, 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 humane 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.
A chart that gave the inequality a very visible and comprehensible form, the so-called 'champagne glass' effect, 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.
|+ Distribution of world GDP, 1989|
|Quintile of Population||Income|
SOURCE: United Nations Development Program. 1992 Human Development Report
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.
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.
Some opponents of globalization see the phenomenon as the promotion of corporatist interests. They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries.
International Social Forums
See main articles: European Social Forum, the Asian Social Forum, World Social Forum (WSF).
The first WSF 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.
Rising petroleum prices can reverse globalization and are leading to world inflation crisis. Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today. In fact, in tariff-equivalent terms, the explosion in global transport costs has effectively offset all the trade liberalization efforts of the last three decades.