Globalization

Globalization entails a growing economic, social, political, and cultural interdependence between different nations and localities. It is a process made possible by advanced technology, which drives both the speed and volume of cross-border transactions. These transactions cover a wide range of goods and services, capital flows, and information. Since the 1970s, globalization has become a powerful force in almost all aspects of our lives, with hardly a place in the world untouched by this phenomenon. From business corporations located in New York City to street vendors in Mumbai (Bombay), all have found themselves part of a worldwide, seamless, and indivisible web of interconnected parts.

Politics plays a pivotal role in globalization. Globalization has magnified interactions among states, localities, and social movements throughout the world. Signs of this are visible in the rise of multilateral organizations, regional pacts, and talk of a borderless world. States, localities, nongovernmental organizations, and labor unions increasingly ignore old boundaries and are driven by the seemingly contradictory stimuli of cooperation and competition. For some, this has opened new worlds of opportunity where masses of people can be mobilized for democratic ends. This interaction, both in place and across cyberspace, makes government [Page 317]more accountable and also more replaceable. For others, it signifies a concentration of wealth and power and the threat of lower living standards. This has led to perilous instability and thunderous reaction from both left- and right-wing protestors.

In addition, globalization shifts economic power from governments to transnational organizations and corporations. With the active role of the World Trade Organization (WTO), World Bank, and International Monetary Fund (IMF), trade, tariff and investment barriers have been lowered, sharply reducing the role of national government. A succession of crises in the 1990s—Mexico, Thailand, Indonesia, Argentina, Turkey, and Brazil—vividly demonstrated the importance of global financial institutions for redressing fiscal imbalances.

Accompanying the shift in economic power is increased interdependence facilitated by standardization. Defined as the international acceptance of uniform criteria for producing goods and services, standardization has promoted globalization. Once goods and information become alike, they become recognizable and interchangeable and thus more easily traded. Common standards of measurement, universal criteria, interchangeable parts, and identical symbols are essential. Just as the grid system of streets enabled land development, so too does standardization facilitate globalization. Products sold at Sony, Nike, and McDonald's can be found across the globe and are easily recognized by consumers. Licenses and professional certifications have also become standardized to allow human resources to flow across regulatory boundaries. International free trade, championed by the WTO, has become an instrument of standardization. Complying with the WTO's regulations, member countries have developed common criteria for their products and opened new markets.

A number of developing countries have also embarked on the road toward global integration. China, India, Malaysia, Brazil, Mexico, South Korea, and Thailand no longer export only raw materials but also finished products and services. In India, for example, software exports accounted for about 10.5 percent of India's total exports in 1999 and 2000. Meanwhile, free trade and the competitive advantages stemming from it have made industry there more efficient and increased wealth.

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