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Globalization is a difficult term to define because it has come to mean so many things. In general, globalization refers to the trend toward countries joining together economically, through education, society and politics, and viewing themselves not only through their national identity but also as part of the world as a whole. Globalization is said to bring people of all nations closer together, especially through a common medium like the economy or the Internet.
In our world, there are few places a person can't get to within a day of travel, and few people a person can't reach via telephone or Internet. Because of modern modes of travel and communication, citizens of a nation are more conscious of the world at large and may be influenced by other cultures in a variety of ways. Time and space matter less, and even language barriers are being overcome as people all over the world communicate through trade, social Internet forums, various media sources, and a variety of other ways.
Arguments against globalization are likely to come from people or nations who wish to resist trends in the global society. For instance, a Fundamentalist Islamic country may resist globalization because they see it as equivalent to westernization-weakening the religious strength of a country and exposing its people to corrupting ideas. Similarly, globalization may be feared or a matter of a concern to any country with strong isolationist policies. In the US, much of the arguments for resisting globalization come from conservative groups.
Some people worry about how certain trends, such as outsourcing, might affect the nation. Concern exists that while outsourcing might benefit a nation which gets jobs, this takes jobs from the country or company that out sources. In this way, though the economy of the world is more globalize, the economy of an individual nation might suffer.
Even though globalization may be a subject of argument, it's highly unlikely to end any time soon. It would take mass destruction of all modern methods of communication and transport, in addition to all countries taking strong isolationist policies in order to reverse the globalization trends in the world. This doesn't mean that some nations or people won't resist what they view as globalization, but you could compare this trend to a runaway train. At this point, there is little to do to stop the communication of minds all over the world through vehicles like the Internet. Even teens and kids are communicating with children from "the four corners" of the globe. It's therefore unlikely that globalization will experience a downward trend, and will likely continue to influence our world in myriad ways.
How Globalization Impacted Companies Due to Cultures
Globalization has had an impact on different cultures and companies around the world.
"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.
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. North America is known for its burgers and fries. McDonald's is a North 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 the usage of Chinese characters in tattoos. These tattoos are popular with today's youth despite the lack of social acceptance of tattoos in China. Also, there is a lack of comprehension in the meaning of Chinese characters that people get, 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.
Theories of Globalization
Joseph Stiglitz, Economist, Nobel Prize winner. Former Chief Economist of the World Bank, Chief Economics adviser during the Clinton administration. He describes what is wrong with globalization as it is currently managed. He talks about the role of the International Monetary Fund and the influence of its policies. He explains how IMF policies have worsened the situation for the poor people of the developing countries. He explains how the middle class in the advanced industrial countries suffers from the wrong way globalization is managed today.
Stiglitz and Roubini on the Globalize Economy
In Globalization and Its Discontents (2002), Stiglitz argues that what are often called "developing economies" are, in fact, not developing at all, and puts much of the blame on the IMF.
Stiglitz bases his argument on the themes that his decades of theoretical work have emphasized: namely, what happens when people lack the key information that bears on the decisions they have to make, or when markets for important kinds of transactions are inadequate or don't exist, or when other institutions that standard economic thinking takes for granted are absent or flawed. Stiglitz stresses the point: "Recent advances in economic theory" (in part referring to his own work) "have shown that whenever information is imperfect and markets incomplete, which is to say always, and especially in developing countries, then the invisible hand works most imperfectly." As a result, Stiglitz continues, governments can improve the outcome by well-chosen interventions. Stiglitz argues that when families and firms seek to buy too little compared to what the economy can produce, governments can fight recessions and depressions by using expansionary monetary and fiscal policies to spur the demand for goods and services. At the microeconomic level, governments can regulate banks and other financial institutions to keep them sound. They can also use tax policy to steer investment into more productive industries and trade policies to allow new industries to mature to the point at which they can survive foreign competition. And governments can use a variety of devices, ranging from job creation to manpower training to welfare assistance, to put unemployed labor back to work and cushion human hardship.
Stiglitz complains bitterly that the IMF has done great damage through the economic policies it has prescribed that countries must follow in order to qualify for IMF loans, or for loans from banks and other private-sector lenders that look to the IMF to indicate whether a borrower is creditworthy. The organization and its officials, he argues, have ignored the implications of incomplete information, inadequate markets, and unworkable institutions-all of which are especially characteristic of newly developing countries. As a result, Stiglitz argues, the IMF has often called for policies that conform to textbook economics but do not make sense for the countries to which the IMF is recommending them. Stiglitz seeks to show that these policies have been disastrous for the countries that have followed them.
Stiglitz wrote on how Globalization failed And why?
According to James M. Rossi, Globalization and Its Discontents is a concise, devastating, and relentless indictment of the global economic policies of the International Monetary Fund, World Trade Organization, and World Bank. Stiglitz singles out the IMF for most of the blame: flawed economic theories, lack of transparency and accountability to the public, and the pursuit of special corporate interests. The book draws on Stiglitz's personal experience as chairman of the Council of Economic Advisers under Bill Clinton from 1993 and chief economist at the World Bank from 1997. During this period Stiglitz became disillusioned with the IMF and other international institutions, which he came to believe acted against the interests of impoverished developing countries. Stiglitz argues that the policies pursued by the IMF are based on neoliberal assumptions that are fundamentally unsound:
Behind the free market ideology there is a model, often attributed to Adam Smith, which argues that market forces--the profit motive--drive the economy to efficient outcomes as if by an invisible hand. One of the great achievements of modern economics is to show the sense in which, and the conditions under which, Smith's conclusion is correct. It turns out that these conditions are highly restrictive. Indeed, more recent advances in economic theory --ironically occurring precisely during the period of the most relentless pursuit of the Washington Consensus policies--have shown that whenever information is imperfect and markets incomplete, which is to say always, and especially in developing countries, then the invisible hand works most imperfectly. Significantly, there are desirable government interventions which, in principle, can improve upon the efficiency of the market. These restrictions on the conditions under which markets result in efficiency are important--many of the key activities of government can be understood as responses to the resulting market failures.
Stiglitz argues that IMF policies contributed to bringing about the East Asian financial crisis, as well as the Argentine economic crisis. Also noted was the failure of Russia's conversion to a market economy and low levels of development in Sub-Saharan Africa. Specific policies criticized by Stiglitz include fiscal austerity, high interest rates, trade liberalization, and the liberalization of capital markets and insistence on the privatization of state assets.
Roubini wrote on the Last Recession and Globalization.
Davos' WEF may be the congregation of the world's globalization elites but, a little paradoxically, this year some of the main themes discussed in Davos is that of the growing income and wealth inequality, the middle classes anxiety about job security, trade and globalization, the rising backlash against globalization and what to do about it to prevent trade and asset protectionism and a retreat from globalization. I myself recently wrote a presentation on this topic (available here to RGE Premium subscribers) and I was one of the panelists in a Davos session where these issues were discussed (see here and here and here and here for some news reports on this Davos debate). The same issue of the challenges that globalization entailsÂ have been discussed in recent month by a wide range of thoughtful analysts including Martin Wolf, Larry Summers, Ben Bernanke and many others.