The Global Impact of Globalization

Introduction We live in an era of globalization." How often have we heard this? And how often have we really thought about what it means? Most people think they know what it is, but do they really?

The term ‘globalization’ has taken on a life of its own. It has become a sort of mystical, romantic term. Globalization is seen as a beneficial thing, even a cosmopolitan thing, a ‘hip’ thing. It is seen as cutting edge to "go global". Many people feel that globalization is a great force bringing the world closer together. There are even new cuddly phrases like ‘global village’ which make us feel good about globalization bringing us all closer together. But when we think about what globalization really is - when we look beneath this surface glamour - we can see the true meaning of the word and the true proponents of this phenomenon.

Unfortunately, globalization is not brought about by elementary school children writing to internet pen-pals (as cozy as that sounds). The real agents of globalization are our friends the multinational corporations - the ‘super-companies’. Globalization is nothing more than the product of the multinational corporation’s search for profit. So, rather than being driven by positive things like a wish to bring the world closer together, globalization is driven by corporations seeking to maximize profits, and part of that search for profits involves the search for cheaper labor. Many companies move into less developed countries to take advantage of the lack of organization of labor there which allows these companies to pay below subsistence-level wages.

============================== Globalization is nothing more than the product of the multinational corporation’s search for profit. ========================= So, rather than making the world a more friendly place, globalization is leading to things such as "Export Processing Zones" - places where millions of people - mostly women - make products which are then shipped into the more developed countries and sold for a huge profit. These zones are integral to what globalization is and does. So, the next time someone talks about the global community, ask yourself if this is something we really want.

Aspects To Globalization There are 4 aspects to globalization. 1) We are global in our information exchange–obviously the internet is the best example of this. f 2) We are also global in our travel–with airplanes and also cars, people move all over the place, and we get to see other countries across the world. 3) We are global in our resource depletion. No society can isolate itself from global environmental degradation. Problems such as air pollution, acid rain, and climate change don’t respect international boundaries. m 4) We are global in our economy. This is what this presentation will focus on.

There are 3 aspects to this global spread of capitalism: production, finance and markets. With regards to production, the products we buy are better traveled than we are! There are many social and environmental impacts from this practice of producing goods in the third world for sale in the first. This practice is called the global integration of production.

The second aspect to the global spread of capitalism is that of finance–financial trading is now a global practice. For example, you can buy stocks from a company anywhere in the world. The third aspect is that of markets. Nowadays, a seller sees its market as not just Canada, but as North America. The same products are being sold all around the world. Conversely, you can go anywhere in the world and buy the same things; McDonalds is everywhere. This has led to global way of living, but it really has lead to the standardization of life.

To say that life is standardized means that life is becoming more uniform everywhere. This is occurring in different ways: 1. Way of dressing - Everyone now wears jeans or a suit and tie. This is a European way of dressing, and so we are seeing the disappearance of local ways of dressing. 2. Way of life - It has become common for everyone to get a job; alternative lifestyles are disappearing. Conspicuous consumption is also becoming more common. 3. Language - Everyone speaks English these days. In Israel, people don’t learn Hebrew and Arabic, which would make sense, instead their second language is English. - English is now the most common second language in the world.

4. Media - Standardization of media can be seen in TV and radio. CNN is everywhere. American and European music is everywhere. Often in other countries you will hear elevator music of Beatles songs rather than local music. - It can be seen that the standardization of life really means the standardization of the American way of life. For example, TV shows seen now around the world are mainly American TV shows. The same can be said of music and styles of clothing. - This is all globalization, and these are all aspects of the global spread of capitalism, but...

…what does capitalism really mean in an everyday sense? Really, capitalism means the combination of private property and wage labor. For example: private property may be a factory, and I can hire people to work in my factory but I have to pay them a wage. This sets in motion a productive relation, which means someone agrees to work and to surrender what they make in exchange for a wage. An example: say I have a cordial factory, if you worked at my cordial factory and then took home so many cases of cordial you would be charged with theft–instead you only get to take home a paycheck. A worker maybe makes $10 / hour but makes enough cordial in that hour worth $50, then $40 of it goes to the capitalist who is the owner of the factory. This $40 is surplus value, or profit, and this is the goal of capitalism. So what? Well, capitalism leads to supercorporations.

These days, companies are getting bigger and bigger. This leads to a monopoly. Certain companies come to dominate the landscape, region, sector of economy, industry or any combination. Some are so big they make more money than most countries. For instance: 51 of the top 100 economies in the world are Trans-National- Corporations (TNCs) 70 percent of global trade is controlled by just 500 corporations the 10 largest corporations’ revenues are 801 billion, more than the hundred smallest countries How does such a monopoly come to be?

It can be horizontal–which means across industry, within different sectors. For example, Irving is involved in retailing, paper production, mini homes, newspapers, kleenex, toilet paper; many different sectors. It can also be vertical–which means a company dominates parts of one industry. Again, take Irving (they are masters). They control supply, processing and harvesting of wood–all parts of the same industry. When companies are this big, they usually become MNCs (multinational corporations). This means most of the corporation’s operations are actually outside of the parent country. For example Nike, while based in the US, does most of its manufacturing in Asia. In this way: Supercorporations are the agents of globalization.

There are various myths out there romanticizing globalization, saying we live in a global village etc. but the driving force is these huge corporations. Globalization is the quest for cheaper labor. Companies do not relocate for balmier weather but for low wage zones, called export processing zones. There are over 200 of these zones around the world, mostly in third world countries without labor regulations. Increasingly, globalization is also about avoiding environmental regulations. This also results in terrible working conditions for those working in these zones, who are mostly women for no money.

The new free trade agreements (e.g. GATT, NAFTA) have created this global environment in which MNCs can move capital, technology, goods, and services freely throughout the world and this is leading to even more domination. This is the largest trade bloc. From this point of view it is easy to see that globalization is not a romantic notion, but something to be watchful of.