Introduction

Globalization is certainly the buzzword of the new millennium. The nature and impact of globalization has been the subject of profound debate and concern in economic circles since the mid-1990s. The controversy surrounding the on-going debates about globalization is whether unfettered market forces will further diverge or converge income the world over. On the one hand, proponents of globalization say it has promoted information exchange, led to a greater understanding of other cultures, raised living standards, increased purchasing power (most especially in the west) and allowed democracy to triumph over communism.1 On the other hand, opponents of globalization, such as those who protested against the ministerial meetings of the World Trade Organization (WTO) in Seattle and most recently in Quebec City, say the Wests gain is at the expense of developing countries. These opponents charge that globalization is synonymous with imperialism and does little more than encourage corporations to relocate factories to countries with the cheapest labor and the weakest environmental laws.2 They further argue that, even in the developed world, not everyone has been a winner. The freedoms granted by globalization are leading to increased insecurity in the workplace. Unskilled workers in particular are under threat as companies shift their production lines overseas to low-wage economies.3 Mainstream economic thought promises that globalization would lift the poor above poverty, dissolve dictatorships, protect the environment, integrate cultures, and most importantly, reverse the growing economic gap between rich and poor countries of the world. But the evidence of globalization has spurred a political backlash such as the street protests that plagued the WTO ministerial meetings in Seattle in fall 1999, Prague in fall 2000, Quebec City in spring 2001, and Genoa in summer 2001. This backlash has succeeded in uniting several categories of the protesters from all walks of life to form a common front against the inequalities caused by globalization. For example, cultural custodians have charged that national cultures and identities are under constant threat due to the spread of Internets, satellite TV, international media networks, and increased personal travel. Democrats have charged that MNCs are becoming more powerful and influential than democratically elected governments. Ecologists are overly concerned about corporations disregard for environmental degradation. Human rights activists are lamenting the loss of freedom to corporate power. To crown it all, small business owners are crying wolf about losing their market shares to mega-corporations due to economies of scale. The frequent observation that globalization is not global, meaning that processes and benefits associated with globalization are uneven throughout the world, is reinforced in this backlash. In other words, a large percentage of the worlds population feels excluded from the benefits of globalization. Statistics abound showing how globalization is increasingly polarizing the world into two different campsimpoverishment and prosperity. As the juxtaposition of wealth and poverty at the opposite extremes of the globe continues, thus the orthodox model of development is being held up for closer scrutiny, as we become knowledgeable of the challenges and opportunities that globalization and the so-called Washington Consensus4 bring in their wake. Given all the uncertainties about globalization, the time is right to rethink the nature of North-South economic relations in the global economy. Is the relationship based on a win-win situation? Finding the answer requires going beyond the modernization thesis and employing an approach based on four related and overlapping, but still distinct concepts: technological innovation and information revolution, trade liberalization, internationalization of capital, and the new international division of labor. These four concepts are the basic building blocks for explaining the two faces of globalizationwhile some countries are enjoying the prosperity globalization brings in its wake, others are languishing in impoverishment as a result of globalization. The level of technological innovation and information revolution in ones country determines whether a country reaps the benefits of globalization or not. The more a country liberalizes its economic and at the same time the more safety valves it creates to protect certain industries determines how competitive that country will be in the international market. Internationalization of capitalthe more production and capital are concentrated in few countries (mostly advanced industrialized countries), the more it engenders monopolistic practices and stifles competition; and the new international division of laborthe more some countries specialize in the

production of primary products while others specialize in manufactured goods, the more the gap between rich and poor countries will continue to widen. The degree of technological innovation and information revolution taking place in a country determines the benefits of globalization accruing to the country concerned. Moreover, an expanding high-tech, information-based economy increasingly defines globalization and shapes the business cycles within it. The size of a nation economy protects a nations market from trade liberalization. The internationalization of capital favors the rich and well-endowed nations more than the poor ones, and moreover, links more countries to a worldwide division of labor and diminishes autonomous development, thus leading to intensification of the contradictions inherent in capitalism. Much of the flow of capital, labor, service, and goods among Asia, America, and Europe is technology-based. The benefits of the new international division of labor lie in different factor abundance in different countries. These concepts help us make sense of what globalization means and which country is well positioned to reap its benefits and which ones will fall behind. The ways in which these ideas fit together helps illuminate such crucial globalization issues as the relationship between impoverishment and prosperity, environmental degradation, national cultures and identities, cultural imperialism, global economies of scale, digital divide, mono-cropping, cheap labor, and the interactions among individuals, firms, and governments. These concepts serve as powerful tools for analysis, not as isolated variables but as patterns of interrelationships. It is my contention here that for globalization to become a win-win situation, rules, regulations, and international conventions must count as much as market mechanism. The way these four concepts technological innovation, trade liberalization, internationalization of capital, and the new international economic orderinteract, shows that without an effective international rules and legal system that protects labor, environment, and monopolistic practices, globalization can lead to oppression, exploitation, and impoverishment. The fact remains: capitalism has always operated within the context of the rule of law. In trying to explain why globalization is not a win-win game, we must ask fundamental questions in terms of these four concepts: Is the information revolution beneficial to all or to some well-endowed countries? Is trade liberalization really a free trade or there are some elements of protectionism acting as a stumbling block on the way of some countries? Does internationalization of capital add up to monopoly capital, which might stifle competition or does it allow infant industries from the South to compete fairly? Does the new international division of labor engender comparative disadvantage or will it relegate the weak economy to the periphery merely as supplier of raw materials, cheap labor, and market for finished products? These questions relates to how unbridled globalizationtechnological innovation, trade liberalization, internationalization of capital, and the new international division of laborcould wreak havoc on some countries while simultaneously opening the doors of opportunity to others. This paper concludes by proposing recommendations on bridging the development gap between developed North and developing South so as to give the future trends in globalization a human face. If there is any lesson to be drawn from the event of September 11, 2001, it is that while many in the first world benefit from free markets in capital, labor, and goods, these same anarchic markets leave ordinary people in the third world largely unprotected. Because we have become a society glutted on market fundamentalism, laissez faire, and affluence, regulation of the market is being nonchalantly shoved aside. Because we have lost a proper perspective of time, history, and education, Third World development is taking its dying breaths. Even if Third World were the only victim, it would still be a remarkable tragedy in the annals of Western civilization. But what is worse is that all these ills that plague Third World nations reveal deeper problems about the West, most especially the United States and the disastrous direction it is headed. What has become apparent to the rest of us after September 11 is that that same deregulated disorder from which financial and trade institutions imagine they benefit is the very disorder on which terrorism depends.5

To fully understand the concept of globalization in theoretical and practical terms, globalization, first and foremost has to be viewed from a historical perspective. It is only through an examination of history that one can fully understand the current environment within which globalization dwells and its implications for the poor and powerless.

Historical Overview
The term globalization was first coined in the 1980s, but the concept stretches back centuries and beyond. The forces and events leading to globalization can be traced as far back as 1492 B.C.E., when people began to link disparate locations on the globe into extensive systems of communication, migration, and interconnections. This formation of systems of interaction between the global and local has been a central driving force in world history. According to Emma Rothschild, one way of looking at globalization from an historical perspective has to do with the economic and social history of international relationships, and in particular with the history of earlier periods of rapid increase in international trade, investment, communication, and influence.6 She went on to add that, the export investment booms of the 1860s and the early twentieth century are just two of the more dramatic examples.7 Other prominent events and forces shaping globalization that have impacted global history deserve to be mentioned here. In 325 B.C.E. Chandragupta Maurya, a Buddhist, triggered the first globalization revolution by combining the expansive powers of a world religion, trade economy, and imperial armies for the first time to connect the Mediterranean, Persia, India, and Central Asia. Between 650 850 B.C.E., Islam followed suit by expanding from Western Mediterranean to India. In 1492, Christopher Columbus and in 1498 Vasco da Gama started navigating the world waterway in an effort to connect the globe. The former supposedly discovered the Americas and the latter discovered the sea route to India. These discoveries set the stage for the inter-imperialist rivalries that engulfed the advanced capitalist countries between 17 thand 19 th centuries. This interconnectedness also paved the way for the slave trade that soon followed in 1650 during the hey-day of mercantilism. By 1648, the imperial powers created the modern state system, which was engendered by the treaty of Westphalia. Adam Smiths influential book the Wealth of Nations8 unleashed a new era of market fundamentalism in Europe. In his book, Smith used the invisible hand to denote the free enterprise system that was fast developing at the time. Though in its nascent stage, it continued to influence other thinking about economic principles and ideas. Concomitantly, between 1865 and 1871, the mechanism that produced the European Union was set in motion. The power struggles and economic competition that ensued resulted in the partition of Africa in the Berlin Conference of 1885. The economic crises and contradictions associated with inter-imperialistic struggles led to several conflicts the world over, most especially the Great Depression of 1930s. Nation states drew back into their shells on realizing that international markets could deliver untold misery in the form of poverty and unemployment. The cumulative effects of these rivalries and contradictions in capitalism hit all parts of the world simultaneously. This helps to explain the First World War in 1914 and again the Second World War in 1935. The League of Nations, founded after World War I to prevent future wars, came short of expectations when it failed to stop World War II and was later replaced by the UN in 1945. Most scholars attributed its failure to the absence of the US to sanction its authority. Most European nations emerged out of the Second World War weak, feeble, and powerless. Their weaknesses served as a breaking point for Europes inability to reverse the militant nationalist movements that sprung up in their colonies, and as a result, capitulated to the subtle process of decolonization triggered by the colonies mass protests and demonstrations, which gradually freed European colonies in Asia and Africa.9 The resolve of Western states to build and strengthen international ties in the aftermath of World War II laid the groundwork for the Bretton Woods System. This system brought together 44 nations in Bretton Woods, New Hamsphire in 1944. The outcomes of that meeting further strengthened globalization, which resulted in the establishment of the three institutionsIMF, World Bank, and GATT.

The period between 1945 and 1989 was dominated by the Cold War as the two super powers competed for both ideological and technological advances. By 1989, after the demise of the former Soviet Union, Francis Fukuyama wrote The End of History, signaling the triumph of democracy over communism. Thus globalization came into full swing with no major opposition. These events, coupled with the industrial revolution, catapulted globalization into the apogee that it presently enjoys today. As this brief historical review has shown, globalization has come a long way. It has survived the African heat, the Soviet winter, the Asian volcanoes, the Turkey earthquake, and finally the Florida hurricanes to become, as Francis Fukuyama10 puts it, a true global phenomenon, and the end of historysymbolizing the victory of capitalism over communism.

Theoretical Perspectives on Globalization

A high degree of conceptual clarity is essential to tracking the historical roots and precedents of globalization and understanding both its causes and its consequences. Unfortunately, what prevails in the burgeoning empirical and theoretical literature on globalization is conceptual confusion and disarray. As Douglas Kellner notes, the term globalization is thus a theoretical construct that is itself contested and open for various meanings and inflections.11 Globalization, in the eyes of some scholars, pundits, and policy makers, is a process, a system, a force, an age, or a revolution.12 Others have used globalization interchangeably with words like internationalization, liberalization, universalization, and westernization13 . These competing perspectives have different meanings. It is difficult to define globalization as a concept because of a vast range of different interpretations. The ambiguity surrounding the term is partly the result of the alacrity with which globalization has been incorporated into the literature. In this paper, globalization is simply defined as a process consisting of technological, economic, political, and cultural dimensions that interconnect individuals, firms, and governments across national borders.14 Distinguished economist David Henderson further expanded the definition of globalization into five related but distinct components:

the increasing tendency for firms to think, plan, operate, and invest for the future with reference to markets and opportunities across the world as a whole; the growing ease and cheapness of international communications, with the Internet the leading aspect; the trend towards closer economic integration, resulting in the diminished importance of political boundaries. This trend is fueled partly by the first two trends, but even more powerfully by official policies aimed at trade and investment liberalization; the apparently growing significance of issues and problems extending beyond national boundaries and the resulting impetus to deal with them through some form of internationally concerted action; and the tendency toward uniformity (or harmonization), by which norms, standards, rules, and practices are defined and enforced with respect to regions, or the world as a whole, rather than within the bounds of nation-states.15

In the literature on globalization, one can schematically distinguish three different dominant theories that provide the point of departure for understanding globalization. These theories are realism, liberalism, and Marxism. First, is the realist school that is closely associated with the writings of Han Morgethau, Kenneth Waltz, and Edward Carr to name a few. Niccolo Machiavelli is considered by many to be one of the exponents and originators of the realist tradition. His emphasis on what is as opposed to what should be, has a tremendous influence on contemporary writers like Hans Morgenthau. Three fundamental assumptions of realism are widely shared in the field. They are that states are the most important actors, that they seek power, and that they pursue their policies in an essentially rational manner, calculating costs and estimating benefits, typically in a logical fashion. 16 The second approach is liberalism, which draws heavily on the writings of Adam Smith, David Ricardo, and W.W. Rostow. These liberals view globalization differently. For them, globalization is a natural outgrowth of capitalist development. Liberals believe that non-state actors are dominant players in the globalization game and that trade is its primary stimulusthe engine of growthfor increasing

productivity and raising income levels in developing countries. Integration in the international economy through trade is supposed to stimulate growth, diffuse new technologies, generate investments, and transform traditional social-cultural practices that are incompatible with the market ethos.17 Liberals also believe that a law-governed international society could emerge without a world government, and that the core sources of poverty are internal to a society: lack of knowledge, education and science, lack of the rule of law, lack of institutions that protect peoples lives and property and provide a framework of incentives for individual action and enterprise, lack of capital equipment of all kinds, massive macroeconomic instability, and predatory governments. These same problems can transcend national borders and spill over to hamper markets in their external dimension, that is, globalization. In 1776, Adam Smith wrote the Wealth of Nations in support of this contention. In his book, Smiths theory blazed the trail in explaining why unrestricted free trade is beneficial to a country. Smith argued that the invisible hand of the market, rather than government policy, should determine what a country imports and what it exports. The basis of Smiths argument was premised on the principle of laissez-fairea hands off political economic philosophy. One of the most influential liberal assessments of the development dilemma in Less Developed Countries (LDCs) to emerge was the work of W.W. Rostow.18According to Rostow, like the developed nations of the North, the less developed South must undergo a series of changes in their socioeconomic system in order to develop and industrialize. Evolutionary change is represented by series of stages of economic growth that society passes through on its way to development. Rostow identified five stages of the modernization process: traditional society, precondition for takeoff, takeoff, drive to maturity, and age of mass consumption. Rostows theory of economic development was based largely on the historical experience of Western nations, especially Britain and the United States. Critics, however, argued that the neo-liberal discourse is both theoretically flawed and not validated by empirical evidence. This perspective led to the next school of thought that vehemently attacked liberalism for failing to take other variables besides the market into their analysis. The third broad perspective is the Marxist approach, which, since the demise of the former Soviet Union, most scholars and pundits have dismissed as no longer useful in explaining contemporary issues in international studies. Still, from my perspective, the Marxist contentions that capitalisms perpetual quest for expansion and its various inherent contradictions make the system fatally flawed remain valid. For Marxist and non-Marxist theorists, the evolution and spread of capitalism worldwide explains the growing disparity between the industrialized nations of the North and the underdeveloped nations of the South. In support of this contention, writing as far back as 1848 in the Communist Manifesto, Marx and Engels argued that for capitalism to survive, it must nestle everywhere, settle everywhere, establish connections everywhere In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations.19 Here, Marxist scholars view globalization as synonymous with imperialism; its, nothing particularly new, and really only the latest stage in the development of international capitalism. Rather than making the world more alike, it further deepens the existing divide between the core, semi-periphery, and the periphery. Among the many writers who explicate theories of imperialism, V.I. Lenin, Immanuel Wallerstein, Andre Gunder Frank, and Samir Amin represent a central dimension of the debate. In his book Imperialism: The Highest Stage of Capitalism (1917) Lenin draws heavily on the works of J.A. Hobson and Rudolf Hilferding, emphasizing the merger of industrial and bank capital into finance capital, the expansion of capital exports, and the increase in military production and militarism. As Lenin puts it: Monopoly is exactly the opposite of free competition; but we have seen the latter being transformed into monopoly before our very eyes, creating large-scale industry and eliminating small industry, replacing large-scale industry by still larger scale industry, finally leading to such a concentration of production and capital that monopoly has been and is the result.20

In his book, Lenin contends that the idea of under-consumption, overproduction, and over-saving is the root cause of capitalist expansion-for-survival and results in postponement of its inevitable crisis and metamorphosis into socialism. This explains according to Lenin why Karl Marxs prognosis of proletariat revolution did not take place. Now let us turn to the central theme of this paper, that is, whether the four concepts described earliertechnological innovation and information revolution, trade liberalization, internationalization of capital, and the new international economic order will produce impoverishment or prosperity in LDCs without rules, regulations, and international conventions guarding globalization.

Technological Innovation and Information Revolution

One of the main drivers of globalization is technology. For the past two decades, globalization has been growing by leaps and bounds with the aid of technology. Global production of technology and international trade in high-tech have had an extraordinary growth between 1975 and 1986, multiplying six and nine times respectively.21 The mainstreams prognosis that technology will spread to LDCs and could produce a digital dividend failed to materialize, instead it produced a digital divide. The forecast failed because it was based on a faulty assumption. As studies have shown, technological development has proven to benefit the big MNCs and well-endowed individuals much more than the small companies and poor individuals. As a consequence, globalization thus has increased the gap between the rich and the poor. The concept of digital divide as it is now called has served as a source of market stratagem in the globalization game used by the rich and well-endowed countries to keep the forces of globalization unchecked. According to a recent UN Human Development Report, industrialized countries, with only 15 percent of the worlds population, are home to 88 percent of all Internet users. South Asia, with 23 percent of the worlds population, has less than 1 percent of the worlds Internet users. In Southeast Asia, only one person in 200 is linked to the Internet. In the Arab states, only one person in 500 has Internet access. The situation is even worse in Africa. With 739million people, there are only 14 million phone lines, fewer than the number in New York and Paris. In a speech at Telecom 99 in Geneva, Switzerland, UN Secretary General Kofi Anan warned of the danger of excluding the worlds poor from the information revolution. The issue of technology transfer has not received any significant attention from the developed nations. In spite of the hues and cries about the Norths monopoly of technology, efforts to transfer technology to the South has resulted, in most cases, in the transfer of obsolete technology that is no longer needed in the North and not appropriate for Third World environment. This situation was especially true during the Cold War. After all efforts to transfer technology failed, most countries in the developing world have now resorted to piracy as their last resort. Case in point, Chinas piracy of Microsoft software22 In the agricultural sector, the situation is even worse. Most developing countries today still lag behind their counterpart in the north as far as mechanized farming is concerned. To a large degree, the agrarian stage of economic development characterized by primitive farm tools amid traditional farming techniques still looms large in most LDCs. Mechanized farming has been directed to cash crops for export to the Norths industries at the expense of food production. In the final analysis, most LDCs now import food from industrialized countries at exorbitant prices hence, famine and starvation. Some critics have questioned the role of MNCs in the agricultural sector of LDCs. MNCs have been reluctant to invest in developing economies. In some cases, where MNCs invested in the economy of the developing nations, they employed capital-intensive production techniques that are often antithetical to job creation and creativity of local artisans, which serves as an impediment to industrial revolution and the consequent destruction of infant industries in developing nations. Thus, the phrase digital divide becomes the rule rather than the exception. The information superhighway, the internet, e-commerce, cable TV, and modern transportation also involves the dissemination of new technologies that have tremendous impact on the polity, society,

culture, and every-day lives of citizens living in developing countries. Time-space compression produced by new media and communications technologies are overcoming previous boundaries of space and time, creating a global cultural village and dramatic penetration of global forces into every realm of life in every region of the world.23 As Renato Ruggiero, director general of WTO puts it: Telecommunications is creating a global audience. Transport is creating a global village. From Buenos Aires to Boston to Beijing, ordinary people are watching MTV, theyre wearing Levis jeans, and theyre listening to Sony Walkman as they commute to work. This global culture includes the proliferation of media technologies that veritably create Marshall Mcluhans dream of a global village. These technologies allow transnational media and information to instantaneously traverse the globe. This process has led some to celebrate a new global information superhighway and others to attack the new wave of media pervasiveness in their lives as cultural imperialism. In the globalization debate between Friedman and Ramonet, Friedman asserted that the wretched of the earth want to go to Disney world, not to the barricades. They want the Magic Kingdom, not les Miserables. Just ask them.24 In a response to Friedmans observation, Ignacio Ramonet referred Friedman to go back and read the 1999 Human Development Report from the United Nations Development Programme, which states that 1.3 billion people (or one-quarter of humanity) live on less than one dollar a day. Ramonet further argues: Going to Disney world would probably not displease them, but I suspect they would prefer, first off, to eat well, to have a decent home and decent clothes, to be better educated, and to have a job. To obtain these basic needs, millions of people around the world are without doubt ready to erect barricades and resort to violence. 25 It is certainly apparent that many people around the world are going to Disney World, wearing jeans and listening to U.S. pop music; what is less apparent is the persistence of underlying value difference. But the goal of globalization still remains: non-western societies are expected to abandon their traditional cultures and to assimilate the technologically and morally superior ways of the West. Not everyone will believe in this assumption, though. The impression that we are moving toward a uniform McWorld is partly an illusion. Fridah Muyale-Manenji notes, culture is a continuous process of change but in spite of the change, culture continues giving a community a sense of identity, dignity, continuity, security and binds society together.26 Globalization in Africa involves one fundamental project: that of opening up the economies of all countries freely and widely to the global market and its forces argues Muyale-Manenji. From the above analysis, it becomes clear how technological innovation and information have combined to widen the gap between the haves and the have-nots. Technology plays a central role in the drama of inequality, and it seems to be making the situation worse, not better when you put it in the perspective of trade liberalization.

Trade Liberalization
Another challenge of globalization is the perception that trade liberalization has exacerbated the gap between rich and poor countries, and between the rich and poor within countries that have liberalized. In this study, Trade liberalization is defined as the opening up of borders so goods and services can move freely across border without any restrictions from tariffs and non-tariffs barriers. Moreover, this definition encompasses laissez fairean economic doctrine that opposes governmental regulation of or interference in commerce. This doctrine has been the main tenet of the so-called Washington Consensusthe idea that markets are efficient, that states are unnecessary, that poor and the rich have no conflicting interests, that markets perform at the highest level when left alone. It held that privatization and deregulation and open capital markets promote economic development, that government should balance budgets and fight inflation and do almost nothing else.27 This has been for the most part the driving force of globalization. As Professor Richard Petrella has noted, six logics of the neo-liberal discourse is now analogous and fast replacing the biblical Ten Commandments: Thou shalt globalise. Thou shalt incessantly strive for technological innovation. Thou shalt drive thy competitors out of business, since otherwise theyll do it to you. Thou shalt liberalise thy market. Thou shalt not countenance state intervention in economic life. Thou shalt privatize.28

Critics charged that this economic logic is more illusion than reality. Conventional wisdom has it that the market is far from being perfect. Critics argue that the evidence on the ground juxtaposed the propagandas presented by this laissez-faire doctrine. They pointed to empirical evidenceof weak economies (witness by Thailand, Indonesia, Russia and Brazil) overwhelmed by easy money and vulnerable to volatile shifts in capital flows, of jobs less secure than the livelihoods abolished by globalization, of sweatshops and child labor, of environmental devastation, of wealth not enlarged but distributed upward to local elite and multinational corporations, and of intensified social and political conflict.29 The reason globalization has failed to spread its benefits, critics further argue, is that, it has been promoted and carried forward at the behest of MNCsand their political supporterswith an over riding interest in maximizing profits. Unlike the U.S. economy, which is regulated by labor, health and environmental laws, the global economy is relatively free of such regulated standards.30 Thus unbridled globalization engenders the wide acceptance of what George Soros calls market fundamentalism, which implies that opening up to international trade represents the most certain path to global prosperity. Since 1950, global trade has grown faster than output. After stagnating in the 1970s and 1980s, trade has boomed in the 1990s, led by the rapid growth of East Asian exports. Merchandise trade grew exponentially, but trade in services grew more sharply; the latter share in world exports rose from 15 percent in 1980 to 18 percent in 1995. The string growth of international trade is due to the liberalization of markets worldwide, the achievement of the Uruguay Round, and other multilateral agreements over the course of the past several decades. Tariffs have been falling, and perhaps even more important, non-tariff barriers are being dismantled. Historically, the U.S. and Great Britain had been in the forefront in the struggle to liberalize trade, but today, advanced economies have not always been helpful. Despite progress in the postwar era, advanced-economy trade barriers remain stubbornly high against clothing, textiles, and agricultural goods, the very products in which LDCs have a natural comparative advantage.31 Thomas Hertel of Purdue University and Will Martin of the World Bank found that the average tariff that rich countries impose on manufactured goods from poor countries is four times higher than the average tariff rich countries impose on each others goods.32 The irony of globalization is that it is premised on expanded trade, but trade liberalization, which is the gospel of IMF and the World Banks standard policies in developing countries, is not practiced in advanced capitalist countries where protectionism still looms large. For LDCs goods to enter the Norths market is analogous to the biblical saying, that is, to pass a camel through a needles eyes, which means literally that it is practically impossible for LDCs goods to enter the Norths market as is evident from the terms of trade between the developed and developing countries that are characterized by protectionism and economic nationalism. The question is: how can LDCs benefit from globalization amid protectionism from the North? The controversy surrounding the issue of terms of trade explains why trade liberalization has not fully benefited the developing economies. A nations terms of trade is referred to as the relationship between the prices of its imports and those of its exports. Nations face declining terms of trade when import prices rise faster than export prices, while rising terms of trade occur when relative export prices grew faster. The diminishing purchasing power of Southern commodities in international trade is a prime example of the Souths declining terms of trade. Statistics point to a dismal performance of the most important terms of trade indicator of the Southforeign exchange earnings of primary commodities. In 1992, the overall real price of commodities, with 1985 as the base of 100, was only 71.33 Different regions have been affected to differing degrees. In 1991, with 1987 as the base year of 100, Sub-Saharan Africas terms of trade was 85 and south Asias terms of trade was 94.34 These movements can translate into billions of dollars: the 3.5% decline in Africas terms of trade from 1992-93, for example, meant that the purchasing power of the continents exports fell by some $3 billion. And this was not an isolated bad year for Africa: from 1991-92, its terms of trade had fallen by 3.4% and from 1990-91, by 7.9%.35 Expanding the focus from Africa, if one looks specifically at exporters of non-oil primary products, the terms of trade records remain dismal. From 1974-80, the terms of trade deteriorated by 5.7% a year; from 1981-86, terms of trade for these non-fuel primary product exporters declined by 3% a year; from 1987-93, the decrease was 1.8% a year.36 Yet, in its 1994 Global Economic Prospects, the World Bank advocated primary commodities as a foundation for economic development, using studies of the USA and Australia to bolster such assertions.37 By 1970s,

the terms of trade had turned significantly against developing countries agricultural products while rising oil prices also hit most of them hard. Loans, both public and private, advanced in the hey-day of oil boom, became crippling burdens as the era of high interest rates set in, while the developing countries economic backwardness discouraged any great influx of private capital from abroad. Another reason why LDCs have not been able to reap the benefits of globalization is that the Western Keynesian consensus that had sanctioned the agricultural levies, the industrialization dream, the social services sensibility, and the activist state of the immediate post-independence decadesand lent money to support all thiswas replaced by neo-liberalism. For developing countries this meant the winding down of any remnant of developmental state. The new driving premise was to be a withdrawal of the state from the economy and the removal of all barriers, including exchange controls, protective tariffs and massive social service cutbacks. Developing countries felt compelled to comply. Enter then, crucially, the age of structural adjustment38 in which the neo-liberal reorientation of economic policy became required medicine for virtually all Third World economies woes. This onesize-fits-all economic growth formula has received criticisms, protests, and demonstrations from activists the world over. But proponents of globalization say nations that adopt the Golden Straightjacket begin to catch up with the advanced economies, while those that reject it become increasingly marginalized.39 There is, in short, a crisis in this Golden Straightjacket approach. The more serious charge is that IMF dictates harmful policies to its client states. For instance, aid packages come with conditions: recipients must privatize inefficient state industries, crack down on corruption, lower tariffs, control budget deficits, and so forth. The adverse effect of this policy has done more harm than good to developing countries, as James Galbraith notes, the crisis of the Washington Consensus is visible to everybody. But not everybody is willing to admit it. Indeed, as bad policies produce policy failure, those committed to the policies developed a defense mechanism. They saw every unwelcome case as an unfortunate exception.40 During the Asian economic crisis for instance, the IMF forced its clients to raise interest rates and slash budget deficits during a recession, which deepened the crisis. Cases of IMF failures in LDCs abound, but I intend not to delve into them here. Another compelling reason while LDCs have not be able to take advantage of the benefits of globalization stemmed from the fact that Third World countries primary commodities continued to face unfair trade practices even during structural adjustment. Also, as noted above, the developing nations irony of consuming what they do not produce and producing what they do not consume persisted. Developing countries mostly import manufactured goods and export raw materials, mainly agricultural and minerals products. The prices of the South exports have continued to fall while the value of imports has continued to rise. Furthermore, the markets for African goods continue to shrink as the developed countries use all types of barriers, tariff and non-tariff. With low prices for their products and fewer markets, developing countries were forced to borrow in order to pay for the imports. Moreover, the problem was further exacerbated by the already huge devastating debts owed to the Western countries. In most cases, these countries were left to borrow more to pay existing debts with little or no capital left for development, hence the debt crisis. Another institution that has been very crucial in the neo-liberal crusade to liberalize trade and unleash capitalism is the World Trade Organizations (WTO), an international organization with 134 member countries. WTO is a forum for negotiating international trade agreements and also the monitoring and regulating body for enforcing such agreements. For most of its history, it has served narrow corporate interest more than the interests of poor and the downtrodden. Critics are quick to point to the position taken by the U.S. government premised on the notion that international law and the World Court is for everyone else and the U.S. is not beholden to this world oversight. In the opinion of WTOs opponents, social, labor, ecology, cultural, and other concerns should take precedence over profit-making everywhere. But in reality, WTO was conceived to cultivate international soil for capitalism to grow without rules and regulations, as is evident from its dealings and deliberations. And as I mentioned earlier, without rules and regulations, LDCs will continue to be marginalized in the globalization game. The real debate between WTO advocates and their left critics is not about protectionism, therefore, but about who will be protected from the ravages of unrestrained competition. The WTO has no rules to guard those who labor or to protect long-term development or to foster cultural sustainability or

diversity. Without such standards, majority of people can actually lose from expanding trade, not only relative to a fair ideal, but also relative to abstaining entirely. The critics theoretical understanding of the WTO as a vehicle only moved by corporate profit-seeking logic is borne out from the WTOs history to date. In every case that has been brought to the organization challenging environmental or public safety legislation on behalf of corporations, the corporations have won. When foreign commercial shrimp fishing interests challenged the protection of giant sea turtles in the endangered species act, the turtles did not stand a chance. When it was Venezuelan oil interests versus the U.S. Environmental Protection Agencys air quality standards for imported gasoline, the oil interests won. When it was U.S. cattle producers against the European Unions ban on hormone-treated beef, European consumers lost. The list goes on. Ten reasons why critics of WTO want it shut down: 1. The WTO prioritizes trade and commercial considerations over all other values 2. The WTO undermines democracy by shrinking the choices available to democratically controlled governments, with violations potentially punished with harsh penalties 3. The WTO actively promotes global trade even at the expense of efforts to promote local economic development and policies that move communities, countries, and regions in the direction of greater self-reliance 4. The WTO forces Third World countries to open their markets to rich multinationals and to abandon efforts to protect infant domestic industries. 5. The WTO blocks countries from acting in response to potential riskimpeding government from moving to resolve harms to human health or the environment, much less imposing preventive precautions 6. The WTO establishes international health, environmental, and other standards at low level through a process called harmonization 7. WTO tribunals rule on the legality of nations laws but carry out their work behind closed doors 8. The WTO limits governments ability to use their purchasing dollars for human rights, environmental, worker rights, and other non-commercial purposes 9. WTO rules do not allow countries to treat products differently based on how they were produced irrespective of whether they were made with brutalized child labor, with workers exposed to toxins or with no regard to species protection 10. WTO rules permit and, in some cases, require patents or similar exclusive protections for life forms.41 Another institution that has been an engine of exploitation in the third world and hence impoverishment is Multinational Corporations (MNCs). Since 1960 there has been a proliferation of MNCs. MNCS grew from 3,500 in 1960 to 60,000 in 1999. The aggregate stock of FDI worldwide increased in tandem from $66 billion in 1960 to over $4,000 billion in 1999, as compared with only $14 billion in 1914.42 MNCs have been the driving force for economic growth in the west, but in developing countries, their activities have raised more eyebrows and have done more harm than good. As the MNCs continued to dominate the economies of Third World countries, the strident consequences of globalization and the phenomenon of trade liberalization overwhelmed and devastated their societies. The only options open to them have narrowed as the increasingly shrinking world imposes on them a choice of integration or the severe conditions of marginalization and stagnation. The sharp rise in Foreign Direct Investment (FDI) underscores the enormous and increasing role of MNCs in international trade, and especially in global production. FDI occurs when a firm invests directly in new facilities to produce and/or market a product in a foreign country. Here we explore the benefits and costs of FDI, first from the perspective of a host country and then from the perspective of the home country. Before we start unveiling the statistics, it is imperative here to distinguish between the flows and stocks of FDI. The flow of FDI refers to the amount of FDI undertaken over a given period. The stock of FDI refers to the total accumulated value of foreign owned assets at a given time. We also talk of outflows of FDI, meaning the flow of FDI out of a country, and inflows of FDI, meaning the flow of FDI into a country.

The assumptions of the neo-liberal discourse is that FDI can make a positive contribution to a host economy by supplying capital, technology, management resources that would otherwise not be available. But the fact on the ground tells a different stories of MNCs stifling competition, engaging in capital flights and threatening sovereignty and autonomy of the host nations. Now, let us review some of the criticisms levied at MNCs. While there are so many criticisms, our focus here will be on four most constructive criticisms. Firstly, host governments sometimes worry that the subsidiaries of MNCs operating in their country may have greater economic power than indigenous competitors because they may be part of a larger international organization. This is sometime the case in LDCs where MNCs have monopolized the market and raised prices above those that would prevail in competitive markets, with harmful effects on economic welfare of the host nations. Another variant of the competition argument is related to the infant industry concern. Import control is discouraged by most MNCs in order to invest in the host nation economy. As usual, a beggar has no choice than to accept all conditionalities for FDI flows. These practices have destroyed most local infant industries that could not compete with large foreign corporations. MNCs have also practiced capital-intensive production in LDCs, and as a result, unemployment figures have reached its highest rate in decades. With the demise of labor-intensive industries and peasant agricultural systems, there are no employment opportunities for the youths. In such dire conditions, how can the youths be a productive part of the global economy? In most cases MNCs activities have also destroyed local entrepreneurship, local artisans, and capital formation. Secondly, the possible adverse effect of FDI on a host countrys balance-of-payments position is two fold. First, capital flightthe subsequent outflow of income as a foreign subsidiary repatriates its profit to its parent company. Such outflows show up as a debit on the current account of the balance of payments. A second concern arises when a foreign subsidiary imports a substantial number of its inputs from abroad, which also results in a debit on the current account of the host countrys balance of payments. Statistics pointing to the lack of finance capital in LDCs reveal that, twenty percent of worlds population in developed countries receives 82.7 percent of total world income, while the 20 percent of the worlds population in the poorest countries receives only 1.4 percent, Malaysian Prime Minister Mahathir Mohammad said. He further asserted that, the top fifth of the worlds richest countries enjoy 82 percent of the expanding 68 percent of foreign direct investment, while the bottom fifth barely more than one percent. Linda Weiss points out that, as of 1991, 81% of the world stock of FDI was located in high-wage Northern Countries: the United Kingdom, Germany and Canada. He adds that concentration of investment in these countries has increased by 12% since 1967. Obviously, the world is not one.43 FDI flows into developing countries had a discontinuity in the 1990s. From only $20 billion in 1980 and $23.7 billion in 1990, FDI inflows rose to $166 billion in 1998, a seven-fold increase (United Nations, 1999, 17). In the same period, the stock of FDI in developing countries rose from 5 percent of GDP to 20.5 percent of GDP, whereas exports and imports rose only slightly from 51.5 percent to 56.6 percent of GDP (United Nations, 1998: 8). Thirdly, another criticism levied at the operations of MNCs in developing countries was that FDI could lead to loss of economic independence for the host country. Key decisions that can affect the host countrys economy will be made by a foreign company that has no real commitment to the host country and over which the host countrys government has no real control. The most egregious example will be ITT in Chile. In 1970, Chilean citizens elected the Marxist Salvador Allende to the presidency. Allende nationalized several foreign businesses including ITT. The senior officers of ITT pressured the Nixon Administration to restore their holdings in Chile. The CIA, through overt and covert operations, overthrew Allende, and ITT resumed its businesses in Chile. Finally, critics have charged that MNCs have encouraged LDCs to concentrate their production on raw materials to the detriment of food security. Thus cash crops production becomes a dominant mode of

production in most LDCs. These productions received primary attention from MNCs by way of incentives for production that by far surpassed that of its counterpartfood crop. This practice has led to the marginalization of womenthe main producers of food in LDCs. In the final analysis, MNCs are viewed as a vast suction-pump for obtaining resources from LDCs. This was accomplished successfully without any rules, regulations, or code of conduct. As a result, LDCs have not been able to reap the benefits of globalization with the exception of the Asian Tigers. Scholars and researchers have been overly concerned in the past about the transfer of financial or material resources from the developed nations to developing nations. Here, I will explore empirical examples to refute this one-way direction of resource flow and reveal the market subterfuge associated with transfer of financial and material resource flow from developing countries to developed countries. Two witnesses stand out to attest to the validity of this argument: World Bank former president, Eugene Black, once admitted that aid program from USA to developing countries were profitable for American businesses. He further stated that, foreign aid created a large and direct market for American goods and services and provided impetus for the opening of new markets overseas for American Corporations. It prepared the economies of the countries receiving aid for a free market economy system in which American firms could prosper.44 The second witness, former U.S. president John F. Kennedy, once concluded that, any cut back in the foreign aid program would result in a perceptible loss of markets and income for the economy of his country.45 In terms of human resource flows from South to North, Southern nations invest billions of dollars each year in the education of skilled workers who often leave their countries for greener pastures in the Norththe brain drain. The United Nations estimated that between 1961 and 1972, Northern Nations received around $51 billion of human capital through migration of Southern professionals.46 The trends that can be discerned by analyzing world trade take on brightly contrasting hues when we turn our attention from liberalism of trade to money. From the above analysis, it is important to recognize that globalization is not positive-sum-gameit is necessary for some countries to lose in order that others may gain.

The Internationalization of Capital

This section focuses on the growth of international capital movements and the merging of capitals the world over called the internationalization of capital. Despite the uneven nature of its impact, the internationalization of capital is leading to an ever more integrated capitalist world economy. This internationalization implies transformations in the relations of production as new areas are incorporated into the circuits of capital. In some cases, it involves the extension of fully capitalist relations of production and a corresponding growth of the working class. In other areas it involves modifications to or the reinforcing of existing social relations. The impact of the growth of transnational agribusiness on the relations of production in agriculture provides many examples of such processes as does the incorporation of petty-commodity producers through the use of subcontracting in manufacturing. Social relations at the periphery are neither frozen into the existing mould by MNCs expansion, nor can they be totally neglected. Rather they are being continuously transformed and redefined by the internationalization of capital, but not in any simple or universal way. The creation of a unified capitalist world economy is accompanied by the extension of the competitive process of standardization and differentiation on a world scale. In other words, there is a growing tendency for the products and production techniques of MNCs to become similar, while at the same time as part of the competitive struggle capital seeks to differentiate itself attaining super profits through the introduction of new products or new techniques, or taking advantage of different local and national conditions.

Internationalization of capitalthe flow of capital to profitable opportunities, without regard to national boundarieshas not merely increased a few times since the late 1960s, it has exploded to Latin American, Asian, and African countries in the form of monopoly capital with its defining characteristicsimperialism.47 V.I. Lenins Imperialism: The Highest Stage of Capitalism makes an interesting case as far as the internationalization of capital is concerned. To Lenin, capitalism had developed such that oligopolies and monopolies controlled the key sectors of the economy, squeezing out or taking over smaller firms and milking domestic markets dry. The result was to look elsewhere for investment opportunities. This logically entailed the creation of overseas markets. As markets expanded, they required more economic inputs such as raw materials, which encouraged the further spread of imperialism to secure such resources.48 MNCs have capitalized on the nature of international system, which is characterized by anarchythe absence of a world government or central authority with enforcement mechanism by ignoring the rules of the game. As a result, they nipped competition in the bud and basically engaged in some forms of monopolistic practices. MNCs have become so pervasive in the global economy to the point that their annual revenues are now compared to that of nation-states. As Table 1 shows, many of the largest economic units in the world are corporations, not states. By these measures Japans Mitsubishi Corporation is larger than Malaysia, and the U.S. Exxon Corporation is larger than Israel and Philippines. In other words, economic globalization in the Third World has gone in one direction. Most MNCs have legally taken possession of the natural resources and land in many Third World countries, and the benefits accruing to the local inhabitants are second to none. The MNCs have succeeded in doing so by using technology, capital, and economies of scalethese are scarce factor endowments that are not available to poor countries. According to the latest UN Human Development Report, the combined assets of the planets three leading billionaires, Bill Gates, the Sultan of Brunei, and the Walton family (Wal-Mart) are greater than the combined GNP of the 43 countries held by the UN to be least developed. The question that comes to mind is: how can a country tackle the problem of monopoly capital amidst economic depression and a lack of central authority in the international arena? In the past, evidence suggests that when the United States was confronted with such a dilemma, such as the Great Depression, it responded with the anti-trust legislation in an attempt to prevent businesses from dominating a particular market through monopoly or restraint to trade. If everyone is to reap the benefits of globalization, the case for international anti-trust law should receive primary attention.

In recent years, antitrust has increasingly become an international issue, with the growing number of international mergers and acquisitions. The European Commission dealing with antitrust recently investigated and turned down the three-way merger proposal, valued at $10.6 billion (U.S.), between Canadas Alcan, Frances Pechinery and Switzerlands Algroup. The Commission felt that the proposed merger would unduly limit competition in certain segments of Western Europes aluminum industry. In another case, EU, for example, has been extremely critical of the merging of Honeywell and GE based on the premise that international mergers and takeovers will stifle competition. Even internal growth may be challenged by antitrust authorities, which confront the paradox that government protection of intellectual property strengthens monopolies. On April 3, 2000, U.S. District Court Judge Thomas Jackson found that Microsoft was guilty of using its natural monopoly in a predatory fashion

by building its internet browser with its operating system. A proposed remedy is to impose the opposite of mergers and acquisitions, namely, the break-up of Microsoft into smaller, independent corporations. An examination of these three industries illustrates the changing nature of antitrust hurdles, and hence the difficulty for management in predicting government decisions. Traditionally, the Merger Guildlines of some antitrust agencies have referred to what is known as the Hirschman-Herfindahl Index (HHI) as a yardstick for measuring monopolistic practices among firms. The HHI is a single number: the sum of squares of the market shares of firms in the market. The HHI value of 2,000 has been seen as the upper limit for effective competition. For example, if there are five equal competitors, each with a market share of 20 percent, then the HHI is exactly 2,000. If the HHI for the market is over the 1,800-2,000 range, then market power is regarded as substantial and competition is regarded as weak, and such a market has been a focus for antitrust scrutiny. With four firms, each of which has a market share of 25 percent, then the HHI is 2,500, which is well above the maximum and effective competition has been judged to be weak. Financial globalization and the corresponding increase in speculation have been spectacular. It is very obvious that the three monsters of globalizationIMF, the World Bank, and WTO are doing more harm than good when you look at the medicine they have prescribed to the ailing developing nations. Their records in LDCs have sparked riots, demonstrations, and protests. The protesters who swarmed through the streets of Washington, D.C., over the weekend of April 14-16, during the meeting of the IMF and the World Bank are in my opinion, more concerned about the globalization game than globalization itself. One of the criticisms levied at IMF is that the G-7the Worlds richest countries have used IMF to make some certain unrealistic demands on developing nations governments and banking institutions to be accountable, transparent, and to rule with probity. Paradoxically these countries are not practicing what they preach in the international arena. Moreover, the critics also point out that the IMF, private bankers and brokerages demand accountability in the form of transparency and due diligence from the governments and banks of developing countries while exempting themselves from the same requirements. Critics argue that WTO, which makes and enforces the rules of international commerce, espouses an exclusive faith in supposedly self-adjusting markets. In practice, the doctrinaire deregulation of international trade often means that the biggest corporations are free to enter markets and extract resources without worrying much about the health, safety or environmental constraints. 49 During the transitional stage, the IMFs Structural Adjustment Programs (SAPs) failed abysmally to make provision for the unintended consequences of SAPs to protect the poor and vulnerable from the harshness of the market. The recent IMF structural adjustment program in Indonesia, for instance, did not revive the economy but plunged it into depression, sending half its businesses into bankruptcy, provoking massive social and political disorder and making it harder than ever to restore confidence of customers of Merrill Lynch and Goldman Sachs.50 The institutions that in most peoples eyes represent the global economythe IMF, the World Bank, and the WTOare reviled far more widely than they are admired; globalization and the policies they prescribed mostly to developing countries have enabled private capital to move across the planet unchecked. Wherever it goes, it bleeds democracy of content and puts profit before people. Now, let us look at the IMF dismal records in LDCs as evident by the same medicine it has prescribed for troubled third world economies for two decades now:

Monetary austerity: Tighten the money supply and raise internal interest rates to whatever heights are needed to stabilize the value of the local currency Fiscal austerity: Increase tax collections and reduce government spending dramatically Privatization: Sell off public enterprises to the private sector Financial liberalization: Remove restrictions on the inflow and outflow of international capital as well as restrictions on what foreign businesses and banks are allowed to buy, own, and operate.

Only when governments sign this structural adjustment agreement does the IMF agree to lend enough to prevent default on international loans that are about to come due and otherwise would be unpayable. Critics charge that the unintended consequences of SAP have taken its toll on the poor and the vulnerable, which are mainly women and children. Tight monetary policy and skyrocketing interest rates not only stop productive investment, stampeding savings into short-run financial investment instead of long-term productive investment, it keeps many businesses from getting the kind of monthto-month loans needed to continue even ordinary operations. This fosters unemployment and drops in production and therefore income. Fiscal austerityraising taxes and reducing government spending further depresses aggregate demand, and also leads to reductions in outputs and increases unemployment. Privatization of public utilities, transport, and banks is always accompanied by layoffs. Hasty removal of restrictions on international capital flows makes it easier for wealthy citizens and international investors to get their wealth out of the country, i.e., removal of capital controls facilitates capital flight, further reducing productive investment, production, income, and employment. Economic development requires the transformation of institutions as well as the freeing of prices, which in turn requires political and social modernization as well as economic reform. The state plays a key role in this process; without it, developmental strategies have little hope of succeeding. If the state is so pervasive in economic development, so why will IMF recommend SAPs that is heavily rooted in laissez faire approach to developing countries as a way of revamping their ailing economies? As Bruce Scott notes, neoclassical economic theory predicts that poor countries should grow faster than rich ones in a free global market. Capital from rich nations in search of cheaper labor should flow to poorer economies, and labor should migrate from low-income areas toward those with higher wages. As a result, labor and capital costsand eventually incomein rich and poor areas should eventually converge.51 The U.S. economy demonstrates how this theory can work in a free market with the appropriate institutions. Unlike the U.S. federal government, multilateral institutions lack the legitimacy to intervene in the internal affairs of most countries. Foreign aid, also referred to as Official Development Assistance (ODA), is another hot topic that has generated more intense debate whenever the issue of globalization has been discussed. ODA has fallen to 0.24 percent of GDP (1998) in advanced countries (compared with a UN target of 0.7 percent) As Michel Camdessus, former Managing Director of IMF put it: The excuse of aid fatigue is not credibleindeed it approaches the level of downright cynicismat a time when, for the last decade, the advance countries have had the opportunity to enjoy the benefits of the peace dividend. But the dependency theorists believe that foreign banks of the Western Nations gain a stronghold on private lending and these banks are less interested in the development of a country than they are in acquiring lucratic terms for the loans to LDCs. As a result, these inhumane practices, according to the theorists have engendered a genre of financial dependence for the indebted country and generous interest receipts for foreign banks. In the final analysis, the dependency theorists reiterated the political and economic strings attached to such assistance reinforce a dominant-subordinate relationship between the developed and less developed nations.52 Overall, the foregoing evidence has demonstrated that consequences of globalization have been highly uneven. While economic of the countries in the North and their corporations have benefited tremendously the rewards have been unequally distributed. Gaps between rich and poor, the haves and the have nots, the developed and developing regions, have grown exponentially. The wealthier nations continue to exploit the people, resources, and land of the poorer nations, often leaving environmental degradation behind. The debt crisis in which the poorer countries owe the richer ones astronomical sums has increased dramatically since the 1970s. In a situation like this, how can LDCs benefit from globalization?

The New International Division of Labor

Increased trade and investment have indeed brought great improvements in some countries, but the global economy is hardly a win-win stuation.The theory of comparative advantage states that countries can maximize their economic potential by specializing in the production of commodities at which they are most efficient in terms of such inputs as capital and labor. David Ricardo originally suggested this concept nearly 200 years ago. For Ricardo, the notion of comparative advantage was a powerful argument for free trade since an unrestricted flow of products between countries would enable them to use their productive resources most efficiently. As Ricardo has noted, It is quite important to the happiness of mankind that our own enjoyment should be increased by the better distribution of labor, by each country producing those commodities for which by its situation, its climate and its natural or artificial advantages, it is adapted, and by their exchanging them for the commodities of other countries, as that they should be augmented by a rise in the rate of profit.53 This kind of specialization, according to Ricardo, would not lead to more wealth for all nations, but to the greatest possible improvement in living conditions for their people. He believed strongly that comparative advantage must work to the benefit of all concerned, and that the poorer governments would only worsen their economic position by withdrawing from the world markets. Ricardos thesis is both simplistic and self-serving, it will only work if poor nations should be allowed to do what todays rich countries did to get ahead, not be forced to adopt the laissez-faire approach, and insisting on the merits of comparative advantage in low-wage, low-growth industries is a sure way to stay poor.54 Until the middle of the 20 th century, when most countries in Africa, Asia, and Latin America won their independence, the local economies were a direct appendage of the colonial center, which directed the pattern of development in the colonies. This pattern of development was based on the logic of the capitalist mode of production that dominated the economies of the center states and evolved according to its needs of accumulation, resulting in uneven development between the imperialist center and the colonies, on one hand, and within the colonies themselves on the other. In general, most of the colonies came to specialize in one or a few raw materials for export and were dependent on the importation of finished manufactured goods from the imperial center. This classic colonial relationship prevailed in a number of developing countries after independence, and led to the restructuring of social economic relations on a neocolonial basisthat is, the continuation of colonial relations through the intermediary of a local ruling class dependent on and nourished by imperialism. Ricardos comparative advantage thesis informed the Souths development strategies throughout the earliest parts of their independence. Developing nations acting on the advise of the World Bank shifted emphasis away from the production of food crops to export crops (monocropping), which resulted in food deficit and the subsequent importation of food with exorbitant prices from former colonial masters. Globalization has exacerbated the adverse effects of the theory of comparative advantage on Third World nations by creating the illusion that free trade will prompt the U.S. and other Western nations to import goods made by low-wage, low-skilled labor and export those made by the highly skilled. Companies, however, undermine that construct by shifting even the most skilled jobs and technologies to low-wage countries. Case in point, General Electric Co. has, for years, been pushing its operating units to drive down costs by globalizing production. Another component of globalization, propelled by technological innovation, is internationalization of productiondifferent components of a product being manufactured and brought together from different parts of the world to be assembled in one location. For example, the Ford motor company has been outsourcing their different component parts of the Ford Explorer to different companies all over the world and later gathered them for assembly in the United States. Actually, few cars can boast of being made in one location today as they were in the past. Another example is the semiconductor chips that are designed in the United States, where the basic wafers are also produced. These are then cut and assembled in Malaysia, and the final products are tested in and shipped from Singapore. As Robert Went has noted, this development has major consequences for how labour is organized and for employees positions in multinationals. If the company thinks it profitable, it can close or move its operations; more often it can threaten to do so in order to extract concessions from trade unions.55

Technological breakthrough has made internationalization of production a success story for the industrialized North and a misery and pain for the impoverished South. In the words of Guillermo Gmez-Pena, the entire Third World countries have become sweatshops, quaint boredellos, and entertainment parks for the First World; and for the inhabitants of the Southern Hemisphere the only options for participation in the global economy are as passive consumers of global trash, or providers of cheap labor or material prima. Those excluded from these options are forced to become part of a transnational economy of crime (sex, drug, and organ trafficking, child labor, kidnappings, fayuca [smuggled goods], etc.)56 In another argument on how the new international division of labor breeds underdevelopment, is the emphasis MNCs places on cheap labor supply, proximity to raw materials, and markets for finished products, which in the long run also supports the premise of neo-colonialism discussed above and the attendant ailing economic crisis, environmental degradation, and poverty in developing countries. The WTOs Seattle meeting also saw huge demonstrations organized by workers, environmentalists, youth, and fair trade campaigners, confronting globalizations other facethe loss of jobs in developed countries as companies relocate production to lower their labor costs. Critics argue that, the real reasons for much of the protest is that everyone knows that the ILO has no enforcement mechanism. Suspicion in developing countries intensified when President Clinton endorsed the idea before the WTO meeting. He trumpeted U.S. passage of an ILO convention on child labor, calling on other governments to do likewise. The U.S. government neglected to point out, however, that the convention only banned child prostitution and the most extreme forms of child exploitation. ILO Convention 138, which takes a much stronger prohibition against the labor of children under 14, remains ungratified. One of the main criticisms levied against American government is that it has double standards in international system, which has put the Americas reputation on the line on several occasions regarding several issues. For instance, The U.S. has not ratified most ILO conventions itself, but shouting about enforcing them everywhere else. According to an environmental groupFriends of the Earth: Neo-liberal economic globalization encourages the pursuit of profit regardless of social and environmental costs. It is associated with increasing levels of inequality, both between and within countries; the concentration of resources and power in fewer and fewer hands (resulting in erosion of democracy); economic, social, political and economic exclusion; economic instability; spiraling rates of natural resource exploitation; and a loss of biological and cultural diversity. The evidence presented above is an indication that globalization is not a win-win situation but a zero-sum game. In theory, globalization provides an opportunity to raise incomes through increased specialization and trade. This opportunity is conditioned by the size of the markets in question, which in turn depends on geography, transportation costs, communication networks, and the institutions that underpin markets.

The Global New Deal: The New International Economic Order Revisited
As I have stated earlier, the global economy today is analogous to the U.S. economy during the Great Depression of 1930s. The Great Depression economy was characterized by slow economic growth, income inequalities, and high rate of unemployment. The president in the White House at the time of the Great Depression was Herbert Hoover. A republican who did not believe in government interference with the market, folded his arms and watched the U.S. economy collapse. The consequences of such inaction kept the nation in economic malaise for a long period of time. It took the genius of Franklin D. Roosevelts New Deal legislation to put the economic back on track. The question that comes to mind now is: Will this strategy work in the international arena, where there is no central authority to sanction its implementation? There is a broad consensus among opponents of globalization who sought alternative approach that completely free unregulated capitalist growth is not likely to address poverty and that some deliberate

measure are neededby governments and international institutionsto facilitate the inclusion of poor countries and people. Some have pointed to the New International Economic Order (NIEO) with some modest modifications from the one previously tabled in the moribund North/South dialogue as a step in the right direction. These modifications to NIEO coupled with some policy prescriptions for national government in LDCs will be referred to here as the Global New Deal: 1. Creation of an integrated program for commodities (IPC), to stockpile and control the price of commodities during periods of oversupply and scarcity 2. Extension and liberalization of Generalized System of Preferences (GSPs) in collaboration with the execution of WTO Doha Development Agenda--in which rich nations promise the reduction of their trade barriers. 3. Development of debt-relief program 4. Increasing Official Development Assistance (ODA) from rich, developed nations of the North to the less developed South 5. Changing the decision-making process in major international institutions such as the United Nations, IMF, World Bank, and WTO to give more voice to Southern nations and reduce developed nations control of these institutions. 6. Increasing the economic sovereignty of LDCs. Several initiatives were stipulated under this umbrella. Key among them were: ensuring LDCs greater control over their natural resources; increased access to Western technology; the ability to regulate MNCs; and preferential trade policies that would stabilize prices for commodities from LDCs and ensure these countries greater access to developed countries markets. 7. Tackling greenhouse gasesThere is broad agreement among Scientists that human activity is leading to potentially disastrous global warming, and that these changes in climate will be especially burdensome for poor countries and poor people. The report urges more effective international cooperation to address these problems. Fair competition is a buzzword when the playing field is not leveled. Accepting these modifications to the global economy will to some extent level that playing field. Failure to implement this Global New Deal will once again throw the international economy system into disarray, and bailing it out will be more costly than fixing it. In the words of Dani Rodrik, Winners have as much at stake from the possible consequences of social instability as the losers. Social disintegration is not a spectator sportthose on the sidelines also get splashed with mud from the field. Ultimately, the deepening of social fissures can harm all.57 It is obvious that a Marshall plan for Third World nations after slavery and colonialism could have gone a long way to revamp their economies. Instead, developing countries were dragged into the world economy in what Paul Baran described as through the Prussian waynot through the growth of small, competitive enterprise, but through the transfer from abroad of advanced, monopolistic business. Developing countries can make a vital contribution through effective domestic policies in conjunction with international efforts to ensure sustainable growth and development:

Improving the investment climate in developing countriesEncouraging investment and creating jobs requires good economic governancemeasures to combat corruption, better-functioning bureaucracies and better regulation, contract enforcement, providing social protection to a changing labor markets, and protection of property rights; Structural reform to encourage domestic competition; Improving delivery of education and health servicesThe developing countries that have gained the most from integrating into the world economy have shown impressive gains in primary education and infant mortality.

This Global New Deal, according to its proponent will breathe new life into most of the worlds ailing economies if allowed to work properly by the developed world.

Conclusion Globalization With a Human Face

The twenty-first-century brings in its wake an awesome development challengepoverty alleviation. The UN has set a target of a 50 percent reduction in the number of absolute poor by 2015. All indications suggest that the target will not be met. As the gap between the rich and the poor continues to widen, thus the orthodox model of development is being held up for closer scrutiny, as we become more aware of the risks as well as the opportunities which globalization and Washington consensus bring in their wake.58 The downturn of the world economy has spurred an intense debate amongst concerned champions of the neo-liberal development orthodoxy. As Professor Robert Fatton, Jr. observes: Obscene patterns of poverty and inequalities amidst ostentatious wealth are thus the very stuff of our global system. They raise basic issues of morality and ethics for the prosperous areas of the world. We need to be asking whether the current inequalities are legitimate and just? Can something be done to achieve some degree of human decency? The key question is: can globalization develop a human face? Opinion differs. For Michel Camdessus, speaking as Head of the IMF, it is clear that a new paradigm of development is already emerging which entails the progressive humanization of basic economic concepts59 However, more critical voices see a complete failure to tackle fundamental issues of redistribution in the reform underway, which would require valuing an economic system only if it works for people and the planet. The neo-liberal discourse argues that development as economic growth via the classical free market has been successful to date and that what is required now are minor reforms to dampen the worst excesses of globalization, and to ameliorate any opposition to the intensification of neo-liberal development policy.60 The critical alternative pathway emanating from some NGOs, a few Third World governments, and a handful of academics, argues that, the dominant model has clearly failed to maximize global welfare and moreover is resulting in increasing global economic instability. What is ideally needed is a radical new approach to defining development and a new development strategy, which puts redistribution and human needs at the top of its agenda. Achieving the most rapid increase in wealth, while necessarily, should not be the ultimate goal of the global economy.61 If there is any lesson to be drawn from the past, it is that restructuring the international economic system to help reach goals (environmental sustainability, economic equity, poverty alleviation, etc.) will require thinking outside the box: not using neoclassical tools and analytical approaches. While autarky is not recommended, emphasis should be placed on de-emphasizing market as a panacea to all poor countries economic woes and on strictly following the path of the Global New Deal. Globalization inter alia must also attend to the growing social inequality that is prevalent in third world countries and to some degree in advanced countries by including the roles played by women in the current agenda, remedy ecological effects of globalization, and create a global civil society that ensures democratic ideals amidst capitalist ethos. For these four related but distinct concepts technological innovation and information revolution, trade liberalization, internationalization of capital, and the new international division of laborto converge income the world over, globalization must take a new course and spread its benefits to all.

Endnotes

"Globalization is not a phenomenon. It is not just some passing trend. Today it is an overarching international system shaping the domestic politics and foreign relations of virtually every country, and we need to understand it as such." As thoughtful people concerned about world affairs, our job is to pick up "globalization," examine it from all sides, dissect it, figure out what makes it tick, and then nurture and promote the good parts and mitigate or slow down the bad parts. Fire Good. Fire Bad. Globalization is much like fire. Fire itself is neither good nor bad. Used properly, it can cook food, sterilize equipment, form iron, and heat our homes. Used carelessly, fire can destroy lives, towns and forests in an instant. As Friedman says: "[Globalization] can be incredibly empowering and incredibly coercive. It can democratize opportunity and democratize panic. It makes the whales bigger and the minnows stronger. It leaves you behind faster and faster, and it catches up to you faster and faster. While it is homogenizing cultures, it is also enabling people to share their unique individuality farther and wider." Globalization has dangers and an ugly dark side. But it can also bring tremendous opportunities and benefits. Just as capitalism requires a network of governing systems to keep it from devouring societies, globalization requires vigilance and the rule of law. Checks and Balances Needed Anti-trust laws, the Securities and Exchange Commission, labor unions, charities, the Federal Trade Commission, and countless other agencies and organizations keep American capitalism in check. Similar transparent mechanisms are needed to make sure globalization is a positive force in the world. Globalization will always have cheerleaders who are blind to the destruction globalization can cause. And it will always have strident opponents blind to the way globalization gives some people their first opportunity to fulfill basic aspirations. As with most issues, the majority of people will be in the middle. They will see globalization not as something to worship or demonize. Instead, they will see it as something to mold, shape and manage for the betterment of everyone.

Globalization and Its Characteristics Globalization is the process of increased interconnectedness among countries most notably in the areas of economics, politics, and culture.McDonalds in Japan, French films being played in Minneapolis, and the United Nations, are all representations of globalization. The idea of globalization may be simplified by identifying several key characteristics: Improved Technology in Transportation and Telecommunications What makes the rest of this list possible is the ever-increasing capacity for and efficiency of how people and things move and communicate. In years past, people across the globe did not have the ability to communicate and could not interact without difficulty. Nowadays, a phone, instant message, fax, or video conference call can easily be used to connect people. Additionally, anyone with the funds can book a plane flight and show up half way across the world in a matter of hours. In short, the "friction of distance" is lessened, and the world begins to metaphorically shrink. Movement of People and Capital A general increase in awareness, opportunity, and transportation technology has allowed for people to move about the world in search of a new home, a new job, or to flee a place of danger. Most migration takes place within or between developing countries, possibly because lower standards of living and lower wages push individuals to places with a greater chance for economic success. Additionally, capital (money) is being moved globally with the ease of electronic transference and a rise in perceived investment opportunities. Developing countries are a popular place for investors to place their capital because of the enormous room for growth. Diffusion of Knowledge The word 'diffusion' simply means to spread out, and that is exactly what any new found knowledge does. When a new invention or way of doing something pops up, it does not stay secret for long. A good example of this is the appearance of automotive farming machines in Southeast Asia, an area long home to manual agricultural labor. Non-Governmental Organizations (NGOs) and Multinational Corporations As global awareness of certain issues has risen, so too has the number of organizations that aim to deal with them. So called non-governmental organizations bring together people unaffiliated with the government and can be nationally or globally focused. Many international NGOs deal with issues that

do not pay attention to borders (such as global climate change, energy use, or child labor regulations). Examples of NGOs include Amnesty International or Doctors without Borders. As countries are connected to the rest of the world (through increased communication and transportation) they immediately form what a business would call a market. What this means is that a particular population represents more people to buy a particular product or service. As more and more markets are opening up, business people from around the globe are coming together to form multinational corporations in order to access these new markets. Another reason that businesses are going global is that some jobs can be done by foreign workers for a much cheaper cost than domestic workers; this is called outsourcing. At its core globalization is an easing of borders, making them less important as countries become dependent on each other to thrive. Some scholars claim that governments are becoming less influential in the face of an increasingly economic world. Others contest this, insisting that governments are becoming more important because of the need for regulation and order in such a complex world system. Is Globalization a Good Thing? There is a heated debate about the true effects of globalization and if it really is such a good thing. Good or bad, though, there isn't much argument as to whether or not it is happening. Let's look at the positives and negatives of globalization, and you can decide for yourself whether or not it is the best thing for our world. Positive Aspects of Globalization

As more money is poured in to developing countries, there is a greater chance for the people in those countries to economically succeed and increase their standard of living. Global competition encourages creativity and innovation and keeps prices for commodities/services in check. Developing countries are able to reap the benefits of current technology without undergoing many of the growing pains associated with development of these technologies. Governments are able to better work together towards common goals now that there is an advantage in cooperation, an improved ability to interact and coordinate, and a global awareness of issues. There is a greater access to foreign culture in the form of movies, music, food, clothing, and more. In short, the world has more choices.

Negative Aspects of Globalization

Outsourcing, while it provides jobs to a population in one country, takes away those jobs from another country, leaving many without opportunities. Although different cultures from around the world are able to interact, they begin to meld, and the contours and individuality of each begin to fade. There may be a greater chance of disease spreading worldwide, as well as invasive species that could prove devastating in non-native ecosystems.

There is little international regulation, an unfortunate fact that could have dire consequences for the safety of people and the environment. Large Western-driven organizations such as the International Monetary Fund and the World Bank make it easy for a developing country to obtain a loan. However, a Western-focus is often applied to a non-Western situation, resulting in failed progress.

Globalization
From Wikipedia, the free encyclopedia

Globalization (or Globalisation) refers to the increasingly global relationships of culture, people, and economic activity. It is generally used to refer to economic globalization: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import quotas. Globalization contributes to economic growth in developed and developing countries through increased specialization and the principle of comparative [1][2] advantage. The term can also refer to the transnational circulation of ideas, languages, and popular culture. Critics of globalization allege that globalization's benefits have been overstated and its costs underestimated. Critics argue that it has decreased inter-cultural contact while increasing the possibility of [citation needed] international and intra-national conflict.

Contents
[hide]

1 Overview 2 History

o o o o o

2.1 Archaic period 2.2 Islamic and Mongol eras 2.3 Maritime Europe 2.4 Industrialization 2.5 Institutionalization

3 Effects

o o o o o

3.1 Economic 3.2 Political 3.3 Cultural 3.4 Environmental 3.5 Health

4 Public opinion

o o o

4.1 United States 4.2 Other developed countries 4.3 Developing countries

5 Media coverage 6 Interpretations

o o

6.1 Positive 6.2 Negative

7 See also 8 References 9 Further reading 10 External links

10.1 Multimedia

[edit]Overview The term was first employed in a publication entitled Towards New Education in 1930, to denote a holistic [3] view of human experience in education. In the 1960s the term began to be used by economists and other social scientists. The term reached the mainstream press in the later half of the 1980s. Since its inception, the concept of globalization has inspired competing definitions and interpretations, with

antecedents dating back to the great movements of trade and empire across Asia and the Indian Ocean [4] from the 15th century onwards. Charles Taze Russell coined the related term 'corporate giants' in 1897, trusts and other large enterprises of the time.
[5]

to describe the largely national

The United Nations Economic and Social Commission for Western Asia defines globalization as: "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 towards the end of the nineteenth century, but it slowed down 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 inward-looking policies pursued by a number of countries in order to protect their respective industries... however, the pace of globalization picked up rapidly during the [6] fourth quarter of the twentieth century..." Tom G. Palmer of the Cato Institute defines globalization as "the diminution or elimination of stateenforced restrictions on exchanges across borders and the increasingly integrated and complex global [7] system of production and exchange that has emerged as a result." Thomas L. Friedman popularized the term "flat world", arguing that globalized trade, outsourcing, supplychaining, and political forces had permanently changed the world, for better and worse. He asserted that the pace of globalization was quickening and that its impact on business organization and practice would [8] continue to grow. Takis Fotopoulos defined "economic globalization" as the opening and deregulation of commodity, capital and labour markets which led to the present neoliberal globalization. "Political globalization" named the emergence of a transnational elite and the phasing out of the nation-state. "Cultural globalization" was the worldwide homogenization of culture. Other elements included "ideological globalization", "technological [9] globalization" and "social globalization". In 2000 the IMF identified four basic aspects of globalization:
[10]

Trade and transactions: Developing countries increased their share of world trade, from 19 percent in 1971 to 29 percent in 1999. But there is great variation among the major regions. For instance, the newly industrialized economies (NIEs) of Asia prospered, while African countries as a whole performed poorly. The makeup of a country's exports are an important indicator for success. Manufactured goods exports soared, dominated by developed countries and NIEs. Commodity exports, such as food and raw materials were often produced by developing countries: commodities' share of total exports declined over the period. Capital and investment movements: Private capital flows to developing countries soared during the 1990s, replacing "aid" or development assistance which fell significantly after the early 1980s.Foreign Direct Investment (FDI) became the most important category. Both portfolio investment and bank credit rose but they have been more volatile, falling sharply in the wake of the financial crisis of the late 1990s.

Migration and movement of people: In the period between 196590, the proportion of the labor forces migrating approximately doubled. Most migration occurred between developing countries andLeast Developed Countries (LDCs). The flow of migrants to advanced economic countries was claimed to provide a means through which global wages converge. They noted the potential for skills to be transferred back to developing countries as wages in those a countries rise. Dissemination of knowledge (and technology): Information and technology exchange is an integral aspect of globalization. Technological innovations (or technological transfer) benefit most the [11] developing and Least Developing countries (LDCs), as for example the advent of mobile phones.

[edit]History Main article: History of globalization

Extent of the Silk Road and Spice traderoutes blocked by the Ottoman Empire in 1453 spurring exploration

The historical origins of globalization remain subject to debate. Though in common usage it refers to the period beginning in the 1970s, some scholars regard it as having an ancient history that encompasses all [12] international activity. [edit]Archaic

period

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 began [13] with the rise of trade links between Sumer and the Indus Valley Civilization in the third millennium B.C. This archaic globalization existed during the Hellenistic Age, when commercialized urban centers enveloped the axis of Greek culture that reached from India to Spain, including Alexandria and the other Alexandrine cities. Others pointed to the trade links between the Roman Empire, the Parthian Empire, and theHan Dynasty. The increasing commercial links between these powers took form in the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and [14] continued to Rome. As many as three hundred Greek ships sailed each year between the Greco[15] Roman world and India. Annual trade volume may have reached 300,000 tons. [edit]Islamic

and Mongol eras

The Islamic Golden Age showed another stage of globalization, when Jewish and Muslim traders and explorers established trade routes, resulting in a globalization of agriculture, trade, knowledge

and technology. Crops such as sugar and cotton became widely cultivated across the Muslim world in this [16] period, while widespread knowledge of Arabic and the Hajj created a cosmopolitan culture.

Portuguese carrack in Nagasaki, 17th century Japanese Nanban art

Native New World crops exchanged globally: Maize, tomato, potato,vanilla,rubber, cacao, tobacco

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. The Pax Mongolica of the thirteenth century included the first international postal service, as well as the rapid transmission of epidemic diseases such [17] asbubonic plague across Central Asia. Up to the sixteenth century, however, the largest systems of international exchange were limited to southern Eurasia (an area where the Balkans and Greece interact with Turkey, Egypt, the Levant, Persia and the Arabian peninsula, continuing over the Arabian Sea to India). [edit]Maritime

Europe

The next phase, known as proto-globalization, was characterized by the rise of maritime European empires, in the 16th and 17th centuries, first thePortuguese and Spanish Empires, and later the Dutch and British Empires. In the 17th century, globalization became developed greater 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 [citation needed] established. The Age of Discovery added the New World to the phenomenon. It began in the late 15th century, [19] when Portugal and Castile sent the first exploratory voyages around the Horn of Africa and to the
[18]

Americas, reached in 1492 by Christopher Columbus. Global integration continued with the European [20] colonization of the Americas initiating the Columbian Exchange, the exchange of plants, animals, foods, human populations (including slaves),communicable diseases, and culture between the Eastern and Western hemispheres. New crops that had come from the Americas via the European [21] seafarers in the 16th century significantly contributed to world population growth.

Animated map showing Colonial empiresevolution from 1492 to present

19th century Great Britain become the first global economic superpower, because of superior manufacturing technology and improved global communications such assteamships and railroads.

[edit]Industrialization In the 19th century globalization approached its modern form. Industrialization allowed cheap production [citation needed] of household items using economies of scale, while rapid population growth created sustained demand. Globalization in this period was decisively shaped by nineteenth-century imperialism. After the First and Second Opium Wars and the completion of England's conquest of India, vast populations became ready consumers of European exports. Parts of sub-Saharan Africa and the Pacific islands were incorporated into the world system. Meanwhile, the conquest of new parts of the globe, notably subSaharan 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 [22] States. The growth of trade was interrupted by World War I and the Great Depression, resurfacing only after World War II. This resurgence was partly the result of planning by politicians to lower borders that hampered trade. Their work led to the Bretton Woods conference, an agreement by major governments to lay down the framework for international monetary policy, commerce and finance, and the founding of

several international institutions intended to facilitate economic growth. This facilitated the global expansion of multinational corporations based mostly in the United States and Europe. [edit]Institutionalization Institutions including the International Bank for Reconstruction and Development (the World Bank), International Monetary Fund (IMF) and the World Trade Organization (WTO) laid the foundations of the explosive growth of the phenomena in the post-Cold War era. Multiple rounds of trade opening simplified and lowered trade barriers. Initially, the General Agreement on Tariffs and Trade (GATT), led to a series of agreements to remove trade restrictions. GATT's successor was the World Trade Organization (WTO), which created an institution to manage the trading system. [23] Exports nearly doubled from 8.5% of total gross world product in 1970 to 16.2% in 2001. The approach [24] of using global agreements to advance trade stumbled with the failure of the Doha round. Many countries then shifted to bilateral or smaller multilateral agreements, such as the 2011 South Korea United States Free Trade Agreement. In the 1990s, the growth of low cost communication networks allowed work done using a computer to be performed without regard to location. This included accounting, software development, and engineering design. In late 2000s, much of the industrialized world entered into the so-called Great [25] [11][26][27][28] Recession, which may have slowed the process, at least temporarily. [edit]Effects

As of 20052007, the Port of Shanghaiholds the title as the World's busiest port.[29][30][31]

[edit]Economic International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) [32] [33][34] between 1955 and 2007. China's trade with Africa rose sevenfold during 200007 alone. By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily to [35] support the expanded levels of trade and investment. Survival in the new global business market required companies to upgrade their products and use [36] technology skilfully in order to survive increased competition.

According to Jagdish Bhagwati, a former adviser to the U.N. on globalization, although there are obvious problems with overly rapid development, globalization is a very positive force that lifts countries out of [1] poverty. According to him, it causes a virtuous economic cycle associated with faster economic growth. The costs and benefits of globalization have not been equally distributed across regions and nations. For example, manufacturing employment in the Midwestern section of the United States declined while [37] growing exponentially in developing countries. [edit]Brain drain Opportunities in rich countries attract skilled workers from poor countries, leading to brain drains. For [38] example, nurses from poorer countries come to the US to work. This phenomenon cost Africa over [39] $4.1 billion for the employment of 150,000 expatriate professionals annually. The Associated [40] Chambers of Commerce and Industry estimates costs to India of $10 billion per year.

A maquila in Mexico

[edit]Working conditions In some developing countries labor policies provide less protection than in developed countries. One example is the use of sweatshops by manufacturers. Clothing makers such as The Gap and Nike were [41] accused of contracting with factories that used child labor in violation of local and US law. In the USA, the National Labor Committee proposed the Decent Working Conditions and Fair Competition Act, which would legally require companies to respect human and worker rights by prohibiting the import, [42] sale, or export of sweatshop goods. 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 safe [43] working conditions. [edit]Business process outsourcing Main article: Business process outsourcing In rich countries, business process outsourcing has been a double-edged sword; it enabled cheaper services but displaced some service-sector jobs. However, in lower-cost locations such as India, the outsourcing industry is the "primary engine of the countrys development over the next few decades, [44][45] contributing broadly to GDP growth, employment growth, and poverty alleviation". [edit]Income equality

A slum in Mumbai, India.

World Bank figures indicate that the number of people living on less than $1 per day-the international standard for extreme poverty-dropped from 1.25 billion (29%) in 1990 to 986 million in 2004 (18% of the [46] larger total population). Critics allege globalization increased income inequality, both between and within nations. On 7 out of 8 metrics, income inequality increased in the twenty years ending 2001. Also, "incomes in the lower deciles of world income distribution have probably fallen absolutely since the 1980s". The article was skeptical of the World Bank's claim that the number of people living on less than $1 a day had held steady at [47] 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' [48] effect, was contained in the 1992 United Nations Development Program Report, This section is outdated. Please update this section to reflect recent events or newly available information. Please see the talk page for more information. (November 2011)

which showed the distribution of global income to be very uneven, with the richest 20% of the world's [49] population controlling 82.7% of the world's income.

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%

A middle-class suburban development in San Jose, California, United States.

Source: United Nations Development Program. 1992 Human Development Report

[50]

In December 2007, World Bank economist Branko Milanovic questioned previous empirical research on global poverty and inequality because improved estimates of purchasing power parity indicated that developing countries were worse off than previously believed. Milanovic remarked, "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." The new data held considerable implications estimates of global inequality and poverty levels. Earlier inequality was estimated at around 65Gini points, [51] versus 70 using the new numbers. The globalization of the job market had positive and negative consequences in developed countries. White-collar workers (engineers, attorneys, scientists, professors, executives, journalists, consultants) were able to compete successfully in the world market and command high wages. For example, Boeing Corp. is the US' largest exporter. In late 2011 the company closed orders worth more [52] than $50 Billion for US aircraft, justifying the 11,000 additional workers it hired that year. Conversely, production workers and service workers were unable to compete directly with much lower-cost workers in [53] developing countries. Low-wage countries gained the low-value-added element of work formerly done in rich countries, while higher-value work remained; for instance, the total number of people employed in [54] manufacturing in the US declined, but value added per worker increased. This resulted in growing income inequality in rich countries. This trend seems to be greater in the United [citation needed] States, where it started to rise in the late 1970s, accelerating in the 21st century; it has now [55] reached a level comparable with that found in many developing countries. [edit]Consumption

Consumer goods exports such as televisions, radios, bicycles, and textiles into the United States, Europe, [56] and Japan fueled the economic expansion of Asian tiger economies. China exports were worth 157.5 Billion USD in October 2011. In that year exports of goods and services constituted 39.7% of China's [57] GDP. The increasing U.S. trade deficit with China cost 2.4 million American jobs between 2001 and [58] 2008, according to a study by the Economic Policy Institute (EPI). From 2000 to 2007, the United [59] States lost a total of 3.2 million manufacturing jobs. Chinese success cost jobs in developing countries as well as well as the West. As of 26 April 2005 "In regional giant South Africa, some 300,000 textile [60] workers have lost their jobs in the past two years due to the influx of Chinese goods". A 2007 report by PricewaterhouseCoopers LLP predicted that by 2050 the economies of the E7 emerging economies (the BRIC countries: China, India, Brazil, and Russia, plus Mexico, Indonesia and Turkey) would be around 50% larger than the current G7 (US, Japan, Germany, UK, France, Italy and Canada). The report forecast that China would overtake the US as the largest economy around 2025, followed by [61] India in 2050. A 2010 report issued by Goldman Sachs predicted that China was about to overtake [62] Japan and could become the world's largest economy by 2020. [edit]Financial interdependency The collapse of the subprime mortgage market in the U.S. led to a global financial crisis and recession on [63] a scale not seen since the Great Depression. According to critics, government deregulation and failed regulation of Wall Street's investment banks were important contributors to the subprime mortgage [64][65] crisis. [edit]Drug and illicit goods trade In 2010 the United Nations Office on Drugs and Crime (UNODC) reported that the global drug trade [66] generated more than $320 billion a year in revenues. Worldwide, the UN estimates there are more than [67] 50 million regular users of heroin, cocaine and synthetic drugs. The international trade of endangered [68] species was second only to drug trafficking among smuggling "industries". 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 asseahorses, rhinoceros horns, saiga antelope horns, and tiger bones and claws) resulted in a black [69][70] market of poachers who hunt restricted animals. [edit]Political

The United Nations Headquarters in New York City.

Globalization seeks to reduce the importance of nation states. Sub-state and supra-state institutions such as the European Union, the WTO, the G8 or theInternational Criminal Court, replace national functions [71] with international agreement. Some observers attribute the relative decline in US power to globalization, particularly due to the country's high trade deficit. This led to a global power shift towards Asian states, particularly China, that unleashed market forces and achieved tremendous growth rates. As [72] of 2011, China was on track to overtake the United States by 2025. [edit]Cultural Mandarin is the first language of 845 million speakers, followed by Spanish (329 million speakers) and [73] English (328 million speakers). However the most popular second language is undoubtedly English, the "lingua franca" of globalization: About 35% of the world's mail, telexes, and cables are in English. Approximately 40% of the world's radio programs are in English. Some 3.5 billion people have some acquaintance of the language. English is the dominant language on the Internet.
[75] [74]

Globalization has influenced the use of language across the world. This street inHong Kong, a former British colony, shows various signs, a few of which incorporate both Chinese and British English.

Cultural globalisation has increased cross-cultural contacts but may be accompanied by a decrease in the uniqueness of once-isolated communities: sushi is available in Germany as well as Japan, but EuroDisney outdraws the city of Paris, potentially reducing demand for "authentic" French [76][77][78] pastry. Globalisation's contribution to the alienation of individuals from their traditions may be modest compared to the impact of modernity itself, as alleged by existentialists such as Jean-Paul Sartre and Albert Camus. Globalization expanded recreational opportunities by spreading pop culture, particularly via the Internet and satellite television. WHO estimates that up to 500,000 people are in flight at any one time. [80] tourism reached $919B, growing 6.5% over 2009.
[citation needed][79]

In 2010, international

The IOM found more than 200 million migrants around the world in 2008, including illegal [82][83] [84] immigration. Remittance flows to developing countries reached $328 billion in 2008.

[81]

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

Non-governmental organizations influence public policy across national boundaries, including [85] humanitarian aid and developmental efforts. Religious movements were among the earliest cultural forces to globalize, spread by force, migration, evangelists, imperialists and traders. Christianity, Islam,Buddhism and more recently sects [86] such as Mormonism have taken root and influenced endemic cultures in places far from their origins.

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

Conversi claimed in 2010 that globalization was predominantly driven by the outward flow of culture and [87][88] economic activity from the United States and was better understood as Americanization. For example, the two most successful global food/beverage outlets are American companies, McDonald's andStarbucks, are often cited as examples of globalization, with over [89] [90] 32,000 and 18,000 locations operating worldwide, respectively as of 2008. [edit]Music The term globalization implies transformation. Cultural practices including traditional music can be lost and/or turned into a fusion of traditions. Globalization can trigger a state of emergency for the preservation of musical heritage. Archivists must attempt to collect, record or transcribe repertoire before melodies are assimilated or modified. Local musicians struggle for authenticity and to preserve local

musical traditions. Globalization can lead performers to discard traditional instruments. Fusion genres can [91] become interesting fields of analysis. Globalization gave support to the World Music phenomenon by allowing locally-recorded to reach western audiences searching for new ideas and sounds. Western musicians adopted many innovations that [citation needed] originated in remote cultures. Music flowed outward from the west as well. Anglo-American pop music spread across the world through MTV. Dependency Theory explained that the world was an integrated, international system. [92] Musically, this translated into the loss of local musical identity. Bourdieu claimed that the perception of consumption can be seen as self-identification and the formation of identity. Musically, this translates into each being having his own musical identity based on likes and tastes. These likes and tastes are greatly influenced by culture as this is the most basic cause for a persons wants and behavior. The concept of ones own culture is now in a period of change due to globalization. Also, globalization has increased the interdependency of political, personal, cultural and [93] economic factors. [edit]Environmental Environmental challenges such as climate change, cross-boundary water and air pollution and overfishing of the ocean, require trans-national/global solutions. Since factories in developing countries increased global output and experienced less environmental regulation, globalism substantially increased [94] pollution and impact on water resources. State of the World 2006 report said India and China's high economic growth was not sustainable. The report stated: 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
[95]

In a 2006 news story, BBC reported, "...if China and India were to consume as
[95]

much resources per capita as United States or Japan in 2030 together they would require a full planet Earth to meet their needs. over dwindling resources [edit]Ecological The advent of global environmental challenges that might be solved with international cooperation include 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 and impact on precious [94][97] fresh water resources. International foreign investment in developing countries could lead to a race to the bottom as [98][99] countries lower their environmental and resource protection laws to attract foreign capital. The reverse of this theory is true, however, when developed countries maintain positive environmental practices, imparting them to countries they are investing in and creating a race to the top [98] phenomenon.
[96]

In the longterm these effects can lead to increased conflict

and in the worst case a Malthusian catastrophe.

At the same time, developing countries like Peru and Ethiopia are working to preserve their unique ecosystems by encouraging economic growth through investments like ecotourism, allowing for the economic gain of locals, an educational experience for visitors, and a low impact way to utilize and [100] preserve their natural resources. [edit]Air The distances are shrinking between continents and countries due to globalization, causing developing and developed countries to find ways to solve problems on a global rather than regional scale. Agencies like the United Nations now must be the global regulators of pollution, whereas [101] before, regional governance was enough. Action has been taken by the United Nations to monitor and reduce atmospheric pollutants through the Kyoto Protocol, the Clean Air Initiative, and studies of [102] air pollution and public policy. Global traffic, production, and consumption are causing increased global levels of air pollutants. The [103] northern hemisphere is the leading producer of carbon monoxide and sulfur oxides. China and India substantially increased their fossil fuel consumption as their economies switched [104][105] from subsistence farming to industry and urbanization. Chinese oil consumption grew by 8% [106] yearly between 2002 and 2006, doubling from 19962006. In 2007, China surpassed the United [107] States as the top emitter of CO2. Only 1 percent of the countrys 560 million city inhabitants (2007) breathe air deemed safe by the European Union. In this way, developed countries outsource some of the pollution associated with consumption in countries where pollution-intensive industries moved. [edit]Forests

Burning forest in Brazil. The removal of forest to make way for cattle ranching was the leading cause of deforestation in theBrazilian Amazon from the mid 1960s.Soybeans have become one of the most important contributors to deforestation in the Brazilian Amazon.[108]

A major source of deforestation is the logging industry, driven by China and Japan.

[109]

At present rates, tropical rainforests in Indonesia would be fully harvested in 10 years and Papua [110] New Guinea in 13 to 16 years. Societies utilize forest resources in order to reach a sustainable level of economic development. Historically, forests in earlier developing nations experience forest transitions, a period of deforestation and reforestation as a surrounding society becomes more developed, industrialized and shift their primary resource extraction to other nations via imports. For nations at the periphery of the

globalized system however, there are no others to shift their extraction onto, and forest degradation continues unabated. Forest transitions can have an effect on the hydrology, climate change, and biodiversity of an area by impacting water quality and the accumulation of greenhouse gases through [111] the re-growth of new forest into second and third growth forests. [edit]Minerals Without more recycling, zinc could be used up by 2037, both indium and hafnium could run out by [112] 2017, and terbium could be gone before 2012. [edit]Postmaterialism and Materialism Societies assign environmental conservation to different levels of importance depending on the stage of development and economic security they have reached. Those societies which have transitioned to postmaterialist values, whose citizens have been able to take basic material security for granted, value conservation of natural resources more than a materialist society, which has not had the chance to reach heightened levels of economic stability or reliable levels of material [113] security. However, the ecological footprint of postmaterial nations is nevertheless currently unsustainable, and only possible due to shifting the burden of environmental degradation onto peripheral nations, which in turn cannot shift the burden on to any other nation, since the planet is finite. The challenge for "postmaterialist" societies is thus to reduce their ecological footprint to sustainable levels. There are no such nations that achieve this as yet (as of 2012), but there are a growing number of localized pilot schemes and social movements within postmaterialist nations that try to achieve some degree of sustainable footprint (e.g. Transition Towns, permaculture, cradle-tocradle design). [edit]Effects of population growth on food supplies With human consumption of seafood having doubled in the last 30 years, seriously depleting multiple seafood fisheries and destroying the marine ecosystem as a result, awareness is prompting steps to [114] be taken to create a more sustainable seafood supply. 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 [115] global food prices. From 1950 to 1984, as the Green Revolution transformed agriculture around [116] the world, grain production increased by over 250%. World population has grown by about 4 billion since the beginning of the Green Revolution and without it, there would be greater famine and malnutrition than the UN presently documents (approximately 850 million people [117][118] suffering from chronic malnutrition in 2005). 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 UK chief government scientist John Beddington. He noted that food reserves were [119][120] at a 50-year low and the world would require 50% more energy, food and water by 2030. The world will have to produce 70% more food by 2050 to feed a projected extra 2.3 billion people and as [121] incomes rise according to the United Nations' Food and Agriculture Organisation (FAO). Social scientists have warned of the possibility that global civilization is due for a period of contraction and economic re-localization, due to the decline in fossil fuels and resulting crisis in transportation and

food production. Helga Vierich predicted that a restoration of sustainable local economic [125] activities based on hunting and gathering, shifting horticulture, and pastoralism. In 2003, 29% of open sea fisheries were in a state of collapse. The journal Science published a four-year study in November 2006, which predicted that, at prevailing trends, the world would run out [127] of wild-caught seafood in 2048. Conversely, globalisation created a global market for farm-raised fish and seafood, which as of 2009 was providing 38% of global output, potentially reducing fishing [128] pressure. [edit]Health Further information: Globalization and disease Globalization helped to spread some of the deadliest infectious diseases. Starting in Asia, [130] the Black Death killed at least one-third of Europe's population in the 14th century. Even worse devastation was inflicted on the American supercontinent by European arrivals. 90% of the populations of the civilizations of the "New World" such as the Aztec, Maya, and Inca were killed by small pox brought by European colonization. Modern modes of transportation allow more people and products to travel around the world at a faster pace, but they also open the airways to the [131] transcontinental movement of infectious disease vectors. One example of this occurring [132] was AIDS/HIV. Due to immigration, approximately 500,000 people in the United States are [133] believed to be infected withChagas disease. In 2006, the tuberculosis (TB) rate among foreign[134] born persons in the United States was 9.5 times that of U.S.-born persons. [edit]Public
[129] [126]

[122][123][124]

opinion
[135]

There is little common ground between proponents and opponents of globalization. [edit]United

States

Fiss, et al., surveyed opinion in 1993. Their survey showed that in 1993 more than 40% of respondents were unfamiliar with the concept of globalization. When the survey was repeated in 1998, 89% of the respondents had a polarized view of globalization as being either good or bad. At the same time, discourse on globalization, which began in the financial community before shifting to a heated debate between proponents and disenchanted students and workers. Polarization increased dramatically after the establishment of the WTO in 1995; this event and subsequent protests led to a [136] large-scale anti-globalization movement. Initially, college educated workers were likely to support globalization. Less educated workers, who were more likely to compete with immigrants and workers in developing countries, tended to be opponents. The situation changed after the financial crisis of 2007. According to a 1997 poll 58% of college graduates said globalization had been good for the U.S. By 2008 only 33% thought it was [137] good. Respondents with high school education also became more opposed. [edit]Other

developed countries

Philip Gordon stated that (as of 2004) a clear majority of Europeans believe that globalization can enrich their lives, while believing the European Union can help them take advantage of globalizations [138] benefits while shielding them from its negative effects. The main opposition consisted of socialists, environmental groups, and nationalists.

US workers were more impacted by automation and outsourcing than Europeans. US income [55] inequality is much higher than in the EU. Gordon points out that EU workers feel less threatened by globalization. The EU job market was more stable and workers were less likely to accept [139] wage/benefit cuts. Social spending was much higher than in the US. In Japan, the debate takes a different form. According to Takenaka Heizo and Chida Ryokichi, as of 1998 there was a perception that the economy was Small and Frail. However Japan was resource poor and used exports to pay for its raw materials. Anxiety over their position caused terms such as internationalization and globalization to enter everyday language. However, Japanese tradition [140] was to be as self-sufficient as possible, particularly in agriculture. The situation may have changed after the 2007 financial crisis. A 2008 BBC World Public Poll as the crisis began suggested that opposition to globalization in developed countries was increasing. The BBC poll asked whether globalization was growing too rapidly. Agreement was strongest in France, Spain, Japan, South Korea, and Germany. The trend in these countries appears to be stronger than in the United States. The poll also correlated the tendency to view globalization as proceeding too [141] rapidly with a perception of growing economic insecurity and social inequality. [edit]Developing

countries

A number of international polls have shown that residents of developing countries tend to view [142] globalization more favorably. The BBC found a growing feeling in developing countries that globalization was proceeding too rapidly. Only a few countries, including Mexico, the countries of Central America, Indonesia, Brazil and Kenya, where a majority felt that globalization is growing too [141] slowly. Many in the Third World see globalization as a positive force that lifts countries out of poverty. The opposition typically combined environmental concerns with nationalism. Opponents consider governments as agents of neo-colonialism that are subservient to multinational [143] corporations. Much of this criticism comes from the middle class; the Brookings Institute suggested this was because the middle class perceived upwardly mobile low-income groups [144] to threaten their economic security. Although many critics blame globalization for a decline of the middle class in industrialized countries, [145] the middle class is growing rapidly in the Third World. Coupled with growing urbanization, this led [146] to increasing disparities in wealth between urban and rural areas. In 2002, in India 70% of the [143] population lived in rural areas and depended directly on natural resources for their livelihood. As a [147] result, mass movements in the countryside at times objected to the process. Rapid growth in China resulted in 0.4% of the population possessing 70% of the nations [148] wealth. Increasing unrest in rural China was attributed to the growing gap in wealth between rural [149] and urban areas. This, plus growing worker discontent in industrialized areas, caused concern [150] among the nation's leadership. [edit]Media
[1]

coverage

A 2005 study by Peer Fiss and Paul Hirsch found large increase in articles negative towards globalization in the years prior. By 1998, negative articles outpaced positive articles by two to [136] one. In 2008 Greg Ip claimed this rise in opposition to globalization can be explained, at least in [137] part, by economic self-interest. The number of newspaper articles showing negative framing rose

from about 10% of the total in 1991 to 55% of the total in 1999. This increase occurred during a [136] period when the total number of articles concerning globalization nearly doubled. [edit]Interpretations [edit]Positive Neoliberals generally argue 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 [151] levels of material wealth. They see globalization as the beneficial spread of liberty and capitalism. Marshall McLuhan popularized the term Global Village beginning in 1962. His view suggested that globalization would lead to a world where people from all countries will become more integrated and [153] aware of common interests and shared humanity. Supporters of democratic globalization believe that the economic development was the first phase of globalization, and should be followed by a phase of building global political institutions. Dr.Francesco Stipo, Director of the United States Association of the Club of Rome, advocated for unifying nations under a world government, suggesting that it "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 [154] of competence". Former Canadian Senator Douglas Roche, O.C., viewed globalization as inevitable and advocated creating institutions such as a directly elected United Nations Parliamentary Assembly to exercise [citation needed] oversight over unelected international bodies. Economist Paul Krugman is a staunch supporter of globalization and free trade and has a record of disagreement with many critics of globalization. He argues that many of them lack a basic [155] understanding of what comparative advantage is. [edit]Negative Main article: Anti-globalization movement See also: Alter-globalization, Global Justice Movement, and Participatory economics The establishment of the WTO in 1995 led to an anti-globalization movement that was primarily concerned with the negative impact of globalization in developing countries. Their concerns ranged from environmental issues to issues like democracy, national sovereignty and the worker [citation needed] exploitation. Opponents in developed countries were disproportionately middle-class and college-educated. This contrasted sharply with the situation in developing countries, where the anti-globalization movement [156] was more successful in enlisting a broader group, including millions of workers and farmers. "Anti-globalization" activities include attempts to demonstrate sovereignty, practice democratic decision-making, restrict the international transfer of people, goods and disfavored beliefs, particularly free market deregulation. Naomi Klein argued that the term could denote either a single social movement or encompass multiple social movements such as nationalism and [157] socialism.
[152]

Hirst and Thompson reject the term as too vague. 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 [citation needed] egalitarianism." Other terms include Global Justice Movement, the Anti-Corporate-Globalization , the Movement of Movements (Italy), the Alter-globalization (France) and Counter-Globalization. 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 [161] example, aid, assistance for refugees, and global environmental issues. Critiques of economic globalization typically look at both the damage to the planet as well as the human costs. They challenge directly traditional metrics, such as GDP, and look to other measures, [162][163] such as the Happy Planet Index. They point to a "multitude of interconnected fatal consequencessocial disintegration, a breakdown of democracy, more rapid and extensive deterioration of the environment, the spread of new diseases, increasing poverty and [164] alienation" which they claim are the unintended consequences of globalization. The terms globalization and anti-globalization are used in various ways. Noam Chomsky stated: 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 "antiglobalization" 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 [165] classes.

[158][159][160]

Critics argue that globalization results in: Poorer countries suffering disadvantages: While it is true that free trade encourages globalization among countries, some countries try to protect their domestic suppliers. The main export of poorer countries is usually agricultural goods. Larger countries often subsidise their farmers (e.g., the EU's Common Agricultural Policy), which lowers the market price for [166] foreign crops. The shift to outsourcing: Globalization allowed corporations to move manufacturing and service jobs from high cost locations, creating economic opportunities with the most competitive wages [44] and worker benefits. Weak labor unions: The surplus in cheap labor coupled with an ever growing number of companies in transition weakened labor unions in high-cost areas. Unions lose their [166] effectiveness and workers their enthusiasm for unions when membership begins to decline. An increase in exploitation of child labor: Countries with weak protections for children are vulnerable to infestation by rogue companies and criminal gangs who exploit them. Examples include quarrying, salvage, and farm work as well as trafficking, bondage, forced labor, [167] prostitution and pornography.

Critics charged that globalization developed according to corporate interests. They advocated global institutions and policies that they believe better addressed the moral claims of poor and working [168] classes as well as environmental concerns. Critics included church groups, national liberation factions, peasant unionists, intellectuals, artists, protectionists, anarchists, those in support of relocalization (e.g., consumption of nearby production) and others. Some were reformist, (arguing for a more moderate form of capitalism) while others were revolutionary (power shift from private to public control) or reactionary (public to [citation needed] private). Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with [169] 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. Critics of globalization talk of Westernization. A 2005 UNESCO report showed that cultural exchange is becoming more frequent from Eastern Asia but Western countries are still the main exporters of cultural goods. 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 [171] of corporatist interests. They also claim that the increasing autonomy and strength of corporate [172][173] entities shapes the political policy of countries.
[170]