Amandeep Sandhu. Encyclopedia of Community. Editor: Karen Christensen & David Levinson, Volume 2, Sage Reference, 2003.
Globalization is the process of world populations becoming interconnected and interdependent. Globalization creates four major transformations. First, globalization stretches social, political, and economic activities across the frontiers of communities, nations, regions, and continents. Second, globalization intensifies the magnitude of the flows and networks of trade, investment, migration, and cultural transmission. Third, with the development of new worldwide transport and communication systems, globalization speeds up global interactions and diffusion of goods, ideas, capital, information, and people. Fourth, the pace of the first three transformations deepens the impact of distant events on everyday life. This deepening involves the rise of an awareness that increasingly many parts of everyday life are connected with things that happen at a distance.
The conventional meaning of globalization involves two interconnected yet separate portrayals: the growth of a global economy and the rise of a global culture. Over the past two decades, however, globalization as a concept has become attached to diverse concepts such as crime, health, law, and trade. Globalization is tied to the growth of global trade—and to the establishment of a global economy. This global economy works in real time: Activities such as manufacturing take place without regard to the limitations of time and space.
Although globalization arose as a concept in the 1970s, the Canadian scholar Marshall McLuhan (1911-1980) coined the term global village in 1964 to denote faster and more intimate contact between individuals and communities brought about by the introduction of radio in the 1920s. Often globalization is confused with internationalization. But whereas in internationalization, “nation” remains the basic unit of understanding, in globalization the basic unit is the globe as a whole. Glocalization, a related concept, is the local expression of globalization or the simultaneous presence of universalizing and particularizing tendencies.
Economic Globalization
The driving factor behind globalization has been the rise of a global economy. The increase in volume of international trade has been impressive, although some scholars have argued that the level of global economic integration reached in modern times has not surpassed the level of economic integration at the turn of the twentieth century. Although a global economy developed in the 1870s when the submarine telegraph allowed people to integrate major financial centers and markets around the world, only after the ICT (information and communication technology) revolution of the 1970s has a much more integrated global economy developed. Those scholars who acknowledge the impressive global integration at the turn of the twentieth century but claim that the current wave of globalization is distinctive argue that the current economic globalization is distinguished by the quality—if not the quantity—of transformation. The ICT revolution responsible for the rise of postfordism—the model of industrial production following the model of fordism (a method of industrial management based on producing inexpensive, standardized commodities in high volume by assembly line and winning employee loyalty with good wages but being intolerant of unionism and employee participation)—changed the basic structure of production. This has facilitated the rise of more horizontal corporations, with flattened hierarchies and more worker initiative. The rise of economic globalization is based squarely on the rise of ICTs because ICTs have reduced distance and allowed a decentralized arrangement of just-in-time production models.
The global economy has come from the world economy—a system in which nationally organized circuits of production and exchange formed the backbone of economic activity. The new global economy—which involves a massive decentralization of production processes and a simultaneous centralization of command and control processes—has defined the new circuits of accumulation (specific constellations of social relations that facilitate the extraction of private profit). One of the main reasons for increased global economic integration is the falling cost of communication and transportation. New modes of communication and transportation have helped to establish new modes of production and distribution networks. Now production is organized around networks that are flexible and highly efficient.
Nearly $20 billion of capital flows around the world every day. Cross-border mergers and acquisitions-driven foreign direct investment (FDI)—investment made to acquire an interest in an enterprise operating in an economy other than that of the investor—have surpassed $1 trillion. Over the past five decades the real world gross domestic product (GDP) has risen at an annual rate of more than 4 percent. During this era of remarkable economic growth, world trade in goods and services has expanded at nearly double the pace of world real GDP. As a result the volume of world trade in goods and services (the sum of both exports and imports) rose from barely one-tenth of world GDP in 1950 to about one-third of world GDP in 2000. But much of the growth in trade has been within the bounds of regional integration agreements, so some experts have argued that globalization can be more properly seen as regionalization.
Transnational corporations (TNCs) are marked by two basic characteristics: (1) They engage in enough business outside the country of origin that they are dependent financially on operations in two or more countries; (2) they make management decisions based on regional or global alternatives. TNCs are the leading players in the rising global economy. There are an estimated 65,000 TNCs today, with 850,000 foreign affiliates. In 2001 foreign affiliates accounted for about 54 million employees, compared to 24 million in 1990.
Supporters of TNCs—and, by extension, of economic globalization—have met resistance from those who do not see TNCs as harbingers of a new age in ethical business interaction. Supporters of economic globalization justify the lifting of trade barriers and tariffs by pointing to the fact that lifting these obstacles to trade will ensure that those who have lagged behind will get to play the game on equal footing with the more advanced players in the international markets. Those opposing economic globalization, however, counter that the weaker economies will not be able to compete with the stronger economies because they are not ready for the cutthroat competition. Those in trade unions of the advanced countries oppose economic globalization because they believe it will shift well-paying manufacturing jobs in countries with advanced economies to the countries where labor is cheaper. They further point to the risk of a race to the bottom among the laborers of different countries, where international business will keep on moving to the cheaper production countries. Furthermore, certain sectors have a moral objection to economic globalization, believing that the drive to open up trade barriers gives the rich economies access to the natural resources of countries in the south but gives countries in the south less chance to benefit.
Cultural Globalization
The rise of multiculturalism and hybridization has added momentum to the feeling that cultures of the world are becoming mixed and are producing a new global culture. This version of globalization is real to some segments of every society; they have access to the same malls, McDonald’s restaurants, Starbucks coffee shops, and MTV television channels in all corners of the world. The rise of a world in which the same television shows, the same Hollywood movies, and the same news channels are seen all over the world has led some to postulate the formation of a new global culture from which people can derive their point of reference. But the underlying belief in the discourse around cultural belief is that what is called “world culture” is, in fact, U.S. culture and thus that the process is Americanization, the spread of U.S. culture, and not globalization. To a degree it is true that it is U.S. culture that is being globalized; but that does not mean that globalization equals Americanization.
The spread of U.S. culture under the guise of global culture is a cause of concern to many who see it in terms of cultural imperialism. The theory of cultural imperialism—the theory that a global culture is liable to be a hegemonic (influential) culture—is nothing new, but the speed and intensity of the worldwide spread of U.S. culture have been astonishing. Those concerned about the particularity of their communities argue that the global culture that has developed is nothing but an impoverished form of consumerism glossed up as global culture. These people fear that this form of hollowed-out consumerism, with its corporate-driven push in the form of advertising and its effort to develop uniform tastes for commodities, will decimate the cultural richness of local communities.
The homogenization thesis—sometimes known as “McDonaldization,” from the idea that the spread of McDonald’s restaurants all over the planet points to the spread of uniform values—holds that the culture of communities is being replaced with a uniform, corporate-driven culture that is mostly Western. If one looks at the global spread of English—with its unparalleled power as the common language of the business world—the homogenization thesis might at first glance seem valid. However, a closer examination has shown that the spread of English globally is not a uniform process at all and that in fact communities localize the English language: Spanglish (Spanish and English) or Hinglish (Hindi and English) form two versions of English localized in two cultures—Spanish and Indian, respectively.
The spread of global culture, therefore, cannot be construed as a linear process from one part of the world to another, but rather as a hybridization process. The migration of people across national boundaries is an integral part of the process of globalization; 140 million people live outside the boundaries of the nation in which they were born. The drop in transportation costs is one reason why in 2000, air traffic totaled 1.82 billion passengers. One result of this movement of populations is that cultures come into contact with other cultures—and diasporic communities are established. A diaspora is a group of people whose members trace their origins to another country but who live or work in another country; diasporas have become the bedrock of globalization. People move back and forth across nation-state boundaries. They also contribute to the formation of a hybrid culture because they act as agents of transmission of cultures. Yoga and feng shui are present in the West because diasporic communities introduced these cultural forms into their host communities.
Political Globalization
Political globalization has redefined the notion of the political in modern times. One of its most prominent characteristics is the rise of multilateral institutions that try to coordinate the global political changes wrought by the changes in global economy, the migration of populations across nation-state boundaries, and the rise of new issues that extend beyond nation-state boundaries. The rise of the World Trade Organization (WTO)—established in 1995 as a result of the General Agreement on Tariffs and Trade (GATT) negotiations—is central to the evolution of global governance. The WTO is concerned with making the world trade system a uniform and predictable arena for world businesses and nations. It is responsible for streamlining the trade policies of nation-states, resolving trading disputes between nations, and reducing barriers to trade among nation-states. It also plays an important role in preserving intellectual trade rights, patents, and so forth. The International Monetary Fund (IMF) and the World Bank also play important roles in global governance. The IMF is a lender of last resort for countries undergoing financial crises; it also tries to make the international economy more transparent by imposing rules. The World Bank is concerned with reducing poverty to balance or reduce the social divisions that might offset the global integration of economies.
Ever since establishment of the Westphalian international system (international state system established by the Peace of Westphalia Treaty [1648], with state sovereignty as the defining feature of polity), the state has played an important role in that system. With the growth of globalization—which has been accomplished with the ideological cover of neoliberal (deemphasizing traditional liberal doctrine in order to seek progress by more pragmatic methods) ideology—the state’s role in the international system has undergone a sea change. Neoliberal ideology holds that the market, by itself, is the most important institution and that it should determine the structure of a community. This means that the state should not stand in the way of the market doing the work of structuring a community according to its worth in the market.
The process of economic globalization has been driven and justified by this ideology of shrinking the state. Some scholars believe that the state is no longer relevant because the real power has shifted to transnational capital. Other scholars, however, believe that the state is still relevant, although it is undergoing restructuring. Those who argue that the state is less relevant point to the upward devolution of state power to supranational organizations and accords such as the WTO, Asia Pacific Economic Cooperation (APEC) organization, European Union (EU), and North American Free Trade Agreement (NAFTA). They also point to the downward devolution of state power to the local level of governance. Those who argue that the state is still relevant claim that this devolution represents the ongoing rearticulation and reconstitution of state power and that, in fact, the state has not been weakened but rather has shifted its role, becoming more involved in some areas than in others.
In the last two decades, neoliberal ideology has held a wide sway in the political world and has caused immense changes in national structures. The U.S. model of economic organization—with a high level of individual responsibility and initiative—has weakened the more communal organization of work systems in Europe and other places. Increasingly, in Europe the work system is shifting toward the U.S. model. In social welfare, the pressure of the U.S. model has decreased the responsibility that the state undertakes.
Theories of Globalization
Four major theories have been advanced to explain globalization. The world-system theory conceives of globalization as a process that has completed the expansion of capitalism across the globe. The world-system theory, which is based on the work of U.S. sociologist Immanuel Wallerstein (b. 1930), has a hierarchy of power in the international system: core, periphery, and semiperiphery. This theory does not conceive of globalization as a new process; instead, it conceives of globalization as the extension of a long historical process that began with the creation of a capitalist world system in sixteenth-century Europe, when European traders established commercial operations across Asia, Africa, and the Americas. World-system theorists contend that the growth of TNCs is instrumental to globalization; some advance the idea that a transnational class that benefits from and drives the process is behind globalization.
Neoliberal institutionalism, the second theory advanced to explain globalization, conceives of the world as still dominated by states, each of which pursues its own best self-interests—security and power—within the constraints created by the other states; but the rise of new international organizations and norms sets its own constraints on states and thus creates a complex interdependence. This theory, in contrast to the world-system theory, conceives of the world as multipolar, with many centers of power and no single hierarchy of power.
World-polity theory—the third theory—holds that the rise of an all-encompassing “world polity” and its associated world culture are crucial to globalization because the world culture supplies norms and rules that determine the response of institutes to shared problems. There is no single hierarchy of power in this theory, but the legitimized ideas are central to the extension of globalization.
The fourth theory is world-culture theory, which conceives of globalization as a process of relativization. Societies relate to a single system of societies and thus take their cues from this system; individuals also relate to a single sense of humanity and thus contribute to a global sense of humanity. The world society in this theory is not beholden to a single set of values; rather, it entails a mixture of hybrid and complex values holding sway over people.
Impact of Globalization
One of the most important impacts of globalization has been on the human habitat. The interaction among ecosystems from different parts of the globe has increased markedly. The increase in world trade is increasingly linked to the ability of businesses to exploit natural resources. As the volume and intensity of trade increase, so does the exploitation of natural resources. Poor countries increasingly find themselves home to industries that use their raw materials. A related concern is the use of lax environmental regulations to draw foreign direct investment—a number of countries offer low or no taxation and lax labor and environmental regulations within export processing zones (EPZs) to attract foreign investment.
The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement under the WTO has encouraged some transnational corporations to try to secure patents on life-forms that have been the shared heritage of humanity. Farmers in developing countries have especially been disturbed by recent efforts to introduce terminator seeds—seeds that self-destruct after a certain time, making farmers dependent upon biotechnology corporations for more seeds—and to patent Basmati rice as private property.
A connection exists between the consumerist ideology being spread through cultural globalization and the idea that people can continue to exist under ongoing conditions. One can argue that the route to industrialization is through a large amount of environmental destruction. Research has shown, though, that a U-shape relationship exists between income and environmental protection. With the rise of economic growth above a certain point, people become more environmentally conscious.
Globalization has made humanity more aware of a shared fate. As of 2003, more than 987 nations had signed the 1987 Montreal Protocol, promising to reduce the emission of chemicals that damage the ozone layer of the atmosphere. Global warming (the rise in the Earth’s temperature caused by the burning of fossil fuels) is changing climate patterns, and a majority of scientists believe that the Earth’s ecosystem has only limited ability to adjust to the increased carbon in the atmosphere. At the 1997 Climate Summit in Kyoto, Japan, world leaders signed the Kyoto Protocol, agreeing to cut back on the emission of carbon into the atmosphere. However, the United States—which is responsible for 25 percent of global emission of carbon—reneged on its promise, setting back efforts to control global warming.
The social impact of globalization also is a cause of concern. Cultural interaction between parts of the globe under the process of globalization is not balanced. Individualism, which arose as a Western value, is spreading to the far ends of the planet and is causing concern about the balance of communities built upon more communal values. The spread of Western values via communication media has caused a shift in values among youth. The spread of a culture of consumerism, which was born in the West and entails a heavy consumption of world resources, is changing the diet patterns of people in other countries. Increasingly, young people prefer fast food to more nutritious local traditional food.
The weakening of the nation-state has shifted the work of international development to nonstate actors. Since the early 1980s, the number of nongovernmental organizations (NGOs) involved in development has increased significantly. Although NGOs are more efficient at delivering development aid and finishing development projects, they also make governments less accountable to citizens for their nonaction in the face of poverty.
The intrusion of Western values in other parts of the world creates resentment among some people, and some of that resentment feeds into a growing religious nationalist opposition to Western values and nations. Some people find the pace of change unsettling and want the security of previous times—and they use a religious nationalism to chalk out a pure position versus the “impurity” that globalization brings.
Rising corporate power has become a fact of life for millions of people. Corporate control of government via money and other means has made a significant number of people cynical about government. These people are organizing to call for social change.
Globalization also is changing the way in which health services are delivered. Telemedicine (the use of advanced telecommunications technologies for medical diagnoses, patient care, and health-related distance learning) has helped deliver heath services to people in rural communities or isolated places.
The changing notion of nation-state boundaries has also affected the legal sphere, where the rise of transnational crime—estimated at 2 percent of gross national product (GNP) annually—has led to novel ways of applying law. Along with traditional forms of crime—drug trafficking, prostitution, illegal gambling, loan sharking—new forms of transnational crimes such as migrant smuggling and cyber crimes have put pressure on traditional ways of fighting crime.
In corporate law there has been an unprecedented rise in the number of legal firms with offices in more than one country. The war crimes tribunals of the United Nations and the newly established International Criminal Court in July 2002 have made it increasingly possible to talk about “transnational justice.” This rise of transnational justice apparatus has called into question the notion of sovereignty that has been the bedrock of modern nation-state existence.
Resistance to Globalization
Over the years a social movement protesting economic globalization has arisen. Referred to as the “antiglobalization movement” or as “globalization from below”—a quantitative and qualitative rise in the volume and density of social networks among civil society actors—this social movement has a constituency of environmental, women’s, and labor movements. The rise of the World Social Forum in Porto Alegre, Brazil—where social activists gather to exchange ideas and plan strategy to counter neoliberalism as a parallel gathering to the World Economic Forum in Davos, Switzerland, where global elites gather to talk business and social issues—is a response to economic globalization.
The trade meetings of multilateral institutions have drawn protests from participants of antiglobalization movements, but the 1999 protest in Seattle, Washington, against the WTO summit stands out among the protests by those concerned with the impact of globalization on community. There has also been a rise of nativist sentiments in some communities, leading to a rise in xenophobia (fear of strangers) and racism against migrants and minorities. Religious nationalism has also come to the fore as people look for a way to define themselves and, in the face of the relentless pace of globalization, find meaning in life.
Globalization is a contested process. Economic globalization will drive further integration of the world, but the shape of this integration remains in question to be answered by the outcome of the contestation between communities.