Dq week 1 320

1 Globalization in Historical Context Illustrated map depicting the journey of Marco Polo along the silk road to China. MPI/Stringer/Archive Photos/Getty Images Learning Objectives * Consider how the perception or bias of the user influences the description of the term globalization. * Understand the fundamental differences between key theories used to explain globalization and international relations—realism, liberalism, and world systems theory—and how these are used to explain behaviors and argue for certain policies in the real world. * Identify the key historical phases or periods of globalization and the major political, economic, and technological factors that contributed to this process during each of these periods. * Describe how globalization can lead to a "flatter" or "smaller" world and what this might mean in terms of our political processes, economic conditions, cultural practices, and uses of technology. * Examine the key debates over globalization—economic, cultural, and political—and why various observers might come to such completely different conclusions about the impacts of this process. * Consider how globalization might change in the future in response to changing technological, economic, and political conditions. Consider the following peculiarities of today's interconnected world. Native Americans in North, Central and South America first domesticated and utilized tobacco well over 1,000 years ago. Not until Christopher Columbus reached the "New World" in 1492 did outsiders learn of the practice of smoking. Today, over 60% of global tobacco production occurs in Asia, and China alone accounts for 40% of tobacco consumption worldwide (Food and Agriculture Organization of the United Nations, 2004). Tea was first brewed and consumed as a beverage in China and Japan around 3,000 BCE, and did not reach England until 1652. Today the British have the highest rates of tea consumption (five pounds per person per year) in the world, while changing tastes in China make coffee, a crop native to Africa, the fastest growing beverage of choice in that country (Alexander, 2004). Meanwhile, there are over 40,000 Chinese restaurants in the United States compared to only 13,000 McDonald's, while in China there have been over 1,000 McDonald's and 4,000 Kentucky Fried Chicken franchises opened in the past 20 years alone (Mellor, 2011; Jie, 2008). These are just a few of literally thousands of examples of ways in which consumer tastes, food products, technologies, ideas, and beliefs have moved around the world over the centuries. Such movements are often considered to be part of a process known as globalization, or the integration of peoples, economies, cultures, technology, and other facets of everyday life. Today, most people take the ready availability of tea, coffee, and ethnic foods for granted, even though widespread access to these items is a recent phenomenon in historical terms. This chapter will consider the road to global integration by examining the concept of globalization from a historical and theoretical perspective. 1.1 Definitions of Globalization Among scholars, economists, political scientists, and sociologists the term globalization defies any single definition. Economist Gerald Helleiner of the University of Toronto said the term globalization, "has now become so slippery, so ambiguous, so subject to misunderstanding and political manipulation" that it should be barred from further use until a more precise definition is agreed upon (Helleiner, 2001, p. 242). In this sense, globalization represents what social scientists refer to as a contested concept, an idea that does not have a fixed or easy definition. As a result, different definitions of globalization lead to varied opinions over when it began and how it influences society. Disagreements over globalization are due, in part, to the fact that it can be thought of in economic, cultural, political, and technological terms. Man touching woman's hand on computer screen. Dimitri Vervitsiotis/Photographer's Choice/Getty Images Technological advances have made it so that people around the globe can communicate with each other in real time. Definitions of globalization frequently take on a normative tone, or one that reflects the opinions or bias of the person or organization giving it. Consider these two definitions from the International Monetary Fund (IMF), an organization designed to ensure the stability of the world's financial markets, and University of Pennsylvania political economist Edward Herman. 1. "Economic 'globalization' is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through trade and financial flows" (IMF, quoted in Ervin & Smith, 2008, p. 3). 2. "Globalization is an active process of corporate expansion across borders . . . [G]lobalization is also an ideology, whose function is to reduce any resistance to the process by making it seem both highly beneficent [producing good] and unstoppable" (Herman, quoted in Ervin & Smith, 2008, p. 4). Both sources discuss the same basic ideas: economic globalization and the increased integration of markets and economies. Yet the first uses phrases like "innovation," "integration," and "progress" while the second warns of "corporate expansion," "ideology," and efforts to reduce "resistance." Other definitions that focus more on the cultural, political, or technological aspects of this phenomenon also frequently reflect the bias or viewpoint of the author. For example, cultural globalization, or the spread of ideas and beliefs around the world, might be described favorably as a "melting pot" or "global community," suggesting a coming together of different peoples. This process has also been described as "cultural imperialism" and the "McDonaldization" of the world, suggesting that one particular group of people is imposing its way of life on others (Stohl, 2004).Therefore, it is important to cut through such value-laden definitions to come to a neutral understanding of what globalization actually means. Features of Globalization Regardless of whether globalization is presented in a favorable way, a handful of common themes, elements, or observations represent this process: * Globalization is a process. Globalization is not a specific condition or end point, but rather an ongoing process of change that's been underway for hundreds of years. Critics of globalization claim that it represents an "agenda" or a "project" of multinational corporations and international trade and financial institutions since it has benefitted some people at the expense of others. However, globalization is such a complex and widespread phenomenon that it's difficult to see how it could be managed or directed by any one group (Rosenau, 1997). * Globalization is multifaceted. Although frequently presented mainly as an economic process, globalization has social, cultural, political, and technological impacts (Rennen & Martens, 2003). Referring to any one policy, practice, or development as globalization misses the point. Instead, globalization involves the interaction of thousands or even millions of events. * Globalization and the shrinking of space. Globalization is often described as a process that is making the world smaller or "flatter" (Friedman, 2006) as advances in transportation and communication shrink distances and make the movement of people and goods easier than ever before (see In Depth: The Containerization of Global Freight Systems). International migration, tourism, and the pursuit of overseas employment opportunities bring people of different backgrounds into contact with one another. * Globalization and the shrinking of time. Technological advances like the Internet and satellite communication allow people to communicate and exchange ideas at increasingly rapid speeds. Such developments hold both great opportunities, such as the spreading of democratic principles, as well as peril, such as the use of the Internet by hate groups or terrorists. * Globalization and the loss of the local. Increasingly, globalization involves the replacement of local activities, such as going to school or the store, with more distant connections, such as online classes or e-commerce. This results in a "delocalization" of our lives (Smith & Doyle, 2002). * Globalization and increased volatility. Prices for energy, food, and other necessities in any one location are often determined by events happening halfway around the world. The tight integration of global financial markets increases the risk that problems in one region can spread to another. One example of this was when the subprime mortgage crisis in the United States helped trigger a global credit crisis in 2008. Likewise, increases in transportation of people and goods increases the risk of the spread of disease (Chanda, 2008). Taken together, these observations allow us to view globalization as a process of increased integration and interconnections between people all over the world. In the words of sociologist Anthony Giddens, globalization is the "intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away . . ." (quoted in Stohl, 2004, p. 236). This represents a value-neutral view; globalization sets up possibilities for progress and decline, cooperation and conflict, self-determination and tyranny. As this chapter will illustrate, the history of globalization and increased global connections demonstrates a mixed record to both celebrate and be wary of. In Depth: The Containerization of Global Freight Systems Everyone has seen shipping containers stacked on an ocean-going vessel, lined up at a port ready for loading, or attached to the back of a tractor-trailer—those multi-colored Legoshaped steel boxes, often with exotic-sounding foreign names on them, that today help move most of the world's freight. But the shipping container and the containerized system that helps move them has been around for only a little over 50 years. How goods were shipped internationally before that can best be illustrated by an example. Imagine a coffee exporter in Brazil who wanted to send a shipment of coffee beans to a roaster in New York. First, a truck would pull up at the coffee exporter's warehouse somewhere in the interior of Brazil. The truck would have to be loaded with sacks of beans and then driven to a port. At the port the sacks would have to be unloaded and placed on a large net, known as a sling. The sling would then be lifted by a crane and placed in the bowels or the "hold" of the cargo ship. There, workers would distribute the sacks and other cargo throughout the ship until it was full and ready to sail. When the ship reached New York, a sling would be lowered in to the ship's hold, the coffee would be stacked on it, the sling would be lifted out of the ship and onto the dock, the coffee would then be transferred to a waiting truck, and then finally transported to the coffee roaster. This process involved each sack of coffee being handled at least five times and maybe more. Along the way sacks might be left waiting on the dock where they could get wet, too hot, or even pilfered or stolen, but for as long as humans moved goods by ship that is how it was done. A crane unloading a shipping container from a cargo ship. ©age fotostock/SuperStock The shipping container is a simple, yet brilliant invention that revolutionized the way goods are transported around the world. Until 1956, that is, when a former trucking company owner named Malcolm McLean shipped 58 containers from Port Newark, New Jersey, to Houston, Texas (Cudahy, 2006). McLean's idea was both ingenious and simple. Shipping containers are just steel boxes with slots or openings on the side and Lego-like openings on the top and bottom. The slots allow them to be picked up by large forklifts and cranes while the Lego-like bottom and top allow them to be stacked one on top of another. Today, the coffee exporter can have a truck with a container on the back pull up to the warehouse and get it loaded. Once loaded the container can be closed, locked, and sealed. The truck then brings the coffee-filled container to the port where it is plucked off the back of the tractor-trailer and stacked on the cargo ship by a device known as a Gantry crane. Upon reaching New York, it is again plucked off of the ship and dropped on the back of a waiting tractortrailer unit for delivery to the coffee roaster. The sacks were never handled except at the origin and destination, they were never left in the sun or rain, and they were never pilfered or stolen. Furthermore, the whole process is far faster and less expensive than traditional shipping methods. To say that shipping containers represented a revolution in shipping would be an understatement. This one invention made the long-distance transport of a whole variety of goods and products economical for the first time and played an enormous role in the globalization of production and trade. Critical Thinking Questions 1. Containerization greatly reduced the need for workers to load and unload cargo, but it facilitated increases in trade between regions. Do you think the increased jobs from more trade offset the loss of jobs in loading and unloading? 2. Over 6 million shipping containers enter the United States every year, and only about 2% of these are ever inspected. What dangers might this pose for the United States? 3. Depending on your views on international trade and globalization, the shipping container could be thought of as a wonderful or terrible invention. What do you think? How Globalization Shapes the World In this short video, Ian Goldin, Director of the 21st Century School at Oxford University in England, explains how technological change and globalization are shaping the world we live in. Critical Thinking Questions 1. Explain the two "Achilles' heels" of globalization that Ian Goldin discusses in this video. 2. Why won't there be a Special Olympics after the year 2030, according to Goldin? 3. What are some of the systemic risks Goldin predicts, which are tied to our future innovations and ongoing globalization? Why will community thinking around solutions need to change? 1.2 Theoretical Perspectives on Globalization and International Relations Processes of globalization, international economics, and relations between states, or governed entities like countries or nations, can be complex phenomena. In order to better understand and explain these phenomena, scholars often make use of theories. Theories provide a structure and a filter through which to view complicated and complex realities. They help to simplify complexity to a level where it can be better understood and explained. Such theorizing, however, is not limited to the academic realm. Theories take on importance when they help form or are used to justify political decisions. For example, debates over whether a country should go to war, sign an international treaty on human rights, or get involved in the politics of another nation are usually framed around a specific theoretical perspective. In that sense, theories take on both positive and normative dimensions. They are used to explain the way the world is, which is a positive perspective. But they are also used to argue for the way the world should be, a normative perspective. Some theories, such as World Systems Theory described in an upcoming section, also provide a critical perspective in the sense that they are critical of current structures of power and political systems. Because theories are used to simplify complex realities, they do not necessarily aim to be "right" or "correct" in all instances. Instead, theories are compared to one another and judged on the basis of their predictive power and how well they help explain the world around us. Likewise, theories are usually not mutually exclusive, and they can shift and evolve over time. As a result, two theories might differ at one level while sharing common elements at another. The following discussion reviews various theories, such as realism, liberalism, world systems, and economic structuralism that aim to explain globalization processes and relations between nations. Realism The fundamental claim of realism is that relations between states are based on a struggle for power and the pursuit of self-interest (Snyder, 2004). Realism tends to take a pessimistic view of world affairs and the prospects for international peace and cooperation. Realists tend to see the world as an anarchical system or one tending toward a state of disorder. As a result, realists place importance on states maintaining or enhancing their own power to protect their self-interest. This power can be exercised through the use of military force or the threat of military force, diplomacy or negotiation, economic influence, or through other means. While realism is sometimes viewed as amoral and too focused on the threat of military or other forms of force and power, it has a more practical side as well. Realists recognize that if a state asserts its influence or power too much or too far, it can undermine its own welfare. At the same time, it's argued that power can be applied in a manner that helps to maintain peace and stability. Realists thus see some value in having a hegemonic power assert its influence to maintain world order and stability. A hegemonic power or state is one that exercises more power than others. In the early phases of modern globalization in the 16th through 18th centuries, realism dominated the thinking of powerful states like Spain and England. This view was paired with an economic approach known as mercantilism. Mercantilist thinking of the time was that the interests of the state were best served by protection of domestic industries and the promotion of exports as a means to accumulate gold and silver. These valuable metals could then finance military buildup and state monopolies to further enhance and expand the power of the state. As such, realist thinking of the time was based on a zero sum principle, the idea that increased wealth and power for one state could usually come only at the expense of another. Realist thinking has evolved since then to recognize a greater role for diplomacy and the dangers of military overreach and expansionism, and few realists today would argue for a mercantilist approach to economic policy. Nevertheless, it is a theory that is still largely based on the application of power and coercion in defense of a state's interests. Thus realism combines both positive and normative elements. We will see in Chapter 5 (5.2) how realist thinking is applied to issues of war and conflict. Liberalism United Nations offices in Geneva. iStockphoto/Thinkstock Liberalism emphasizes the importance of relationships between states and international institutions, such as the United Nations, in maintaining peace and stability. Liberalism theory should not be confused or associated with the domestic political label of being "liberal" or left-leaning. Instead, liberalism is a theory based on a belief or hope that independent states will find it in their best interests to cooperate with one another. Rather than a reliance on power, liberalism emphasizes the importance of economic ties between states and international institutions (such as the United Nations) in maintaining stability and peace. As a result, liberalism is sometimes referred to as liberal institutionalism, institutionalist interdependence, or complex interdependence theory. Rules and institutions can govern relations between states who are equal, alleviating the need for a hegemonic power. Whereas realists tend to focus on the state as the primary unit of analysis, liberal theory places more emphasis on the role of individuals in domestic affairs and international institutions in managing relations between states. Historically, liberalism became an important theory late in the 18th and into the 19th century. Unlike the mercantilist zero sum view of economic relations between states, liberal thinking suggested that open and free trade between nations could be to the benefit of all. Likewise, today's neoliberals, contemporary followers of liberal theory, see increased economic integration and trade between nations as a stabilizing force in world affairs. Democracy and transparency in governance, robust international institutions like the World Trade Organization (WTO), and economic interdependence ensures that states will view aggression and warfare as undermining their own self-interest. Thomas Friedman (2006) uses the example of India and Pakistan to illustrate this point. In 2002 tensions between these two countries escalated dramatically, and there was increasingly open talk of nuclear war as each country amassed troops on their borders. U.S. State Department warnings urging Americans to leave the region immediately began to impact U.S. corporate investment in India's growing high-tech sector. According to Friedman, the Indian government "got the message" that military aggression was going to hurt its economy, and as a result it toned down the rhetoric and sought a diplomatic resolution to its conflict with Pakistan. Like realism, liberalism is a theory that can be used to explain the way the world works, a positive perspective, as well as argue for the way the world should work, a normative perspective. World Systems and Economic Structuralism World Systems Theory (WST) represents a critique of capitalism and seeks to explain global economic inequality through a historical analysis. Capitalism is an economic and political system dominated by private owners of assets and the means of production. Developed by American sociologist Immanuel Wallerstein (2000), WST traces the start of capitalism to around 1500. It was then that European powers first began to trade on a regular basis with, and frequently conquer and colonize, regions in Africa, Asia, and the Americas. Though they started this process with only small advantages in technology, wealth, and power, the European powers historically at the "core" of this capitalist system were able to exploit regions at the "periphery" and become more powerful and wealthy in the process (Robinson, 2007). Core countries in the world system are characterized by greater levels of wealth and technological progress. These now include the developed countries of the North such as the United States, Germany, or Japan. Countries in the periphery are seen to be mainly a source for cheap labor and raw materials. These are often referred to as less-developed countries of the South and could include many countries of Africa, as well as some in Asia and Latin America. This sets up a system of unequal exchange between the two and leads to a condition of dependence of the periphery on the core. These relations are not fixed, however, as countries can move from the periphery to the semi-periphery. Countries that might be considered part of the semi-periphery today would include China, Brazil, and Mexico. Thus WST places less emphasis on the importance of individual states in determining world conditions and events. Instead, it views the global economy as a world system with a logic and momentum of its own. Multinational corporations and other capitalist enterprises can operate freely within this system to exploit cheap labor and raw materials from the periphery. This is the basis for the critical perspective provided by the WST since it views this system as basically unfair and unjust. In Depth: Immanuel Wallerstein (1930-) Image of Immanuel Wallerstein wikicommons Immanuel Wallerstein (1930–) Immanuel Wallerstein enrolled in Columbia College in 1947, where he was influenced by the American Veterans Committee (AVC), among other organizations and movements. After earning his bachelor's degree in 1951, he enlisted in the U.S. Army, in which he served from 1951 to 1953. Upon completing his service, he returned to Columbia, where he wrote his master's thesis on McCarthyism. His work incorporated ideas put forth by sociologist C. Wright Mills, and the positive reception to the paper helped Wallerstein come to view himself as a political sociologist. He earned both a master's degree and PhD from Columbia, in 1954 and 1959, respectively. Several key experiences in the 1950s shaped Wallerstein's early ideas and interests. Never particularly interested in European or Western affairs, in 1951 Wallerstein took part in an international youth congress where he met delegates from Africa. A year later, in 1952, he attended another youth congress, this time in Dakar, Senegal, where he was exposed to ideas that would become the basis of several future African nations' movement to achieve independence from their colonial rulers. In 1955 he received a Ford Foundation African Fellowship, which allowed him to study Africa further and to write a dissertation about the Gold Coast (modern day Ghana) and the Ivory Coast. His expertise in African issues and politics comprised the cornerstone of his scholarship until the 1970s, when Wallerstein shifted from studying post-colonial Africa to global capitalism. These developments led him, in the 1970s and 1980s, to write the three volumes that comprise The Modern World-System, for which he is best known. In 2003 the American Sociological Association presented him with the Career of Distinguished Scholarship Award for his numerous and influential writings on world-systems analysis. Like WST, economic structuralism is generally critical of capitalism as an economic system. Structuralists point to structural features in an economy that tend to perpetuate inequalities both within and between countries. For example, structuralists point to large gaps between the rich and the poor in many capitalist economies and argue that the very structure of these economies—the tax code, educational system, economic opportunities, and political system—allows these disparities to persist. Similar structural factors are at work in terms of economic relations between nations. Historically, the less developed countries of the world have relied heavily on exports of raw materials and agricultural commodities while having to import finished and manufactured products. This set up a situation where less developed countries faced declining terms of trade, or the ratio of the price of a country's exports over the price of its imports. As global prices for raw materials and agricultural products fell and prices for manufactured goods increased, the less-developed countries suffered. This kind of analysis of economic relations between nations results in the critical perspective reached by economic structuralists. Figure 1.1: World map showing migration patterns of humans out of Africa Map of the world with a timeline that depicts early human migrations. The map illustrates how humans first inhabited Africa, on the left side of the map, and progressively migrated to Europe, Oceania, Asia, and eventually to America, shown on the right side of the map. Maury Aaseng The "first globalizers" were small bands of humans that migrated out of Africa more than 50,000 years ago. These humans migrated through what is known today as Asia and Europe before reaching the Americas some 15,000 to 35,000 years ago. 1.3 A Brief History of Globalization Given the variety of definitions and interpretations of globalization, it should come as no surprise that there are also serious disagreements over its history. Many scholars point to events of the past 500 years or so as the starting point for globalization, including the discovery of the New World by Christopher Columbus in 1492, European colonization of large areas of the world from the 16th to the 19th centuries, or the start of the Industrial Revolution in the late-18th century (Rennen & Martens, 2003; Osterhammel & Peterson, 2005). Others suggest that globalization is "a process that has been evolving for a very, very long time" and place its origins back 5,000 years or longer (Bernstein, 2008, p. 14). The First Globalizers Nayan Chanda of the Yale Center for the Study of Globalization suggests that the "first globalizers" were bands of humans leaving Africa for regions of Europe and Asia between 100,000 and 50,000 BCE, or Before Common Era (2003). Although they may have come in contact with other groups, there is little evidence that these early humans sustained any form of regular contact or interaction with others. Not until about 3,000 BCE, or roughly 5,000 years ago with the emergence of the Egyptian, Sumerian, and Babylonian civilizations is there evidence of sustained trade and contact between peoples of widely different regions. Economic historian William Bernstein (2008) writes that at this time the Persian Gulf was already serving as a major artery for trade in metals, ivory, and linen between regions of Africa, present-day Iraq and Iran, and the Mediterranean. Over time, trade in incense, oils, wood, wine, and fabrics spread throughout the Mediterranean Basin, deeper into Africa, and further into the Indian Ocean. By 400 BCE the Phoenicians, who were master sailors and traders, were linking the eastern Mediterranean with both coasts of Africa and coastal regions of Western Europe. And by around 100 BCE, Greek merchants were sailing thousands of miles to India after learning to harness the seasonal monsoon winds of the Indian Ocean. Not only were these traders exchanging goods, they were also facilitating the movement of ideas, knowledge (for example, of navigation), technology, and culture. Figure 1.2: Map showing trade routes of early civilizations A map that shows the Roman, Parthian, Kushan, Meroe, Abyssinian, and Chinese Hun empires and the different trade routes between them. The different routes also include information about the main goods traded. The map spans from Europe to Northern Africa and East Asia. Maury Aaseng More than 2,000 years ago complex trading networks were already established, linking civilizations in the Mediterranean to regions within Africa, Asia, and Europe. These trading networks moved goods ranging from precious metals and silk to rare animals and spices. At the height of its power, an incredible volume and variety of long-distance trade was undertaken to satisfy the demands of the Roman Empire. Roman demand for cotton, spices (such as black pepper), oils, exotic animals, and especially silk drove traders to travel farther distances and find new ways to move goods between regions. The famed Silk Road linking Han Dynasty China to the Mediterranean was one example of the reach of these trade networks. Even as the Roman Empire began to decline in the 4th century, new centers of demand for exotic goods arose in other parts of the Mediterranean Basin and the Middle East. Arab cultures grew in power and prominence from 600 to 1300 AD and spread new ideas of philosophy, mathematics, and medicine along with trade in goods throughout Asia, North Africa, and Southern Europe. By around 1450 the Renaissance period was underway in Europe, bringing with it significant advancements in science, literacy, and economic organization. This period saw the rise of nation-states and the emergence of mercantilism as a dominant approach to economic management. A mercantilist approach is one based on government control of foreign trade, and this helped to set up what many consider to be the true start of the process of globalization. The Age of Empire, 1500–1800 Fabric map showing the silk road. Benainous/Tinacci/Gamma-Rapho via Getty Images The Silk Road facilitated the delivery of imported goods to the Roman Empire. While trade between regions and contact between cultures was frequent and widespread dating back to 3000 BCE or earlier, many of the trading systems that developed were highly localized or disappeared as civilizations collapsed, tastes changed, or warfare made trade impossible. Likewise, the trading networks that did arise linked only regions of Africa, Europe, and Asia, but excluded trade with the New World. As a result, historians and scholars of globalization often refer to this earlier period as a "prehistory of globalization" or "archaic globalization" since the entire globe was not linked together (Osterhammel & Peterson, 2005). Not until around 1500 with the rise of the Portuguese and Spanish colonial empires do we see the beginnings of what would become an almost unstoppable process of global integration. From roughly 1500 to 1800, a convergence of political, economic, and technological events would begin to weave large areas of the world together for the first time. Journalist Thomas Friedman (2006) refers to this period as "Globalization 1.0." A key reason to set the start of this period at around 1500 is because of advances in navigation, travel, and our understanding of world geography. Christopher Columbus sailed from Europe to the New World in 1492, initiating a process that would bring much of Central and South America into the Spanish Empire. Six years after Columbus, Portuguese explorer Vasco de Gama sailed around the Cape of Good Hope at the southern tip of Africa to open a new trade route between Europe and Asia. And in 1519 Portuguese explorer Ferdinand Magellan sailed from Spain around Cape Horn at the southern tip of South America in search of a new trade route to Asia. Although he was killed in battle with a local chieftain in the Philippines in 1521, the remnants of Magellan's expedition returned to Spain in 1522, completing the first circumnavigation of the world. Control over various trade routes, especially the key route between Europe and Asia through the Indian Ocean, was of vital strategic importance to European powers. These trade routes enabled regular contact between Europe and other inhabited areas of the world for the first time. Following mercantilist economic logic of the time, first the Portuguese and the Spanish, and then the British and the Dutch, sought to amass as much wealth as possible through control and dominance of these trade routes. In 1600 the British East India Company was established, and in 1602 the Dutch United East Indies Company was founded (Remmen & Martens, 2003). These two companies could be thought of as the world's first multinational corporations. In order to finance their massive global operations, consisting of hundreds of ships and thousands of sailors, soldiers, clerks, and traders, they were the first organizations to sell shares of stock in the companies to private investors. The British and Dutch East India Companies worked closely with their respective governments to set up trading systems that would return wealth, in the form of gold and silver, back home. Such wealth was perceived as the basis of power and essential to the further expansion of empire. Whereas mercantilist logic and the building of empire were the initial drivers of globalization in the 16th and 17th centuries, political and philosophical forces also began to play a role. The Thirty Years War between European powers ended in 1648 with the signing of the Treaty of Westphalia. This established the legal basis and legitimacy of modern nationstates and led to a further consolidation of populations and power under a single authority. Later that century and into the 18th century, new ideas about liberty and the rights of the individual spurred revolutions in North America in 1776 and in France in 1789. Social philosopher Adam Smith (1723–1790) published The Wealth of Nations in 1776 as well. In it, Smith developed the theory of "the invisible hand," which holds that individual pursuit of self-interest has a tendency to advance the common good through the process of market transactions. Taken together, these political and philosophical changes shifted power from monarchs, feudal lords and the Church to nation-states and the market, and provided a further moral justification for commerce and the pursuit of wealth. The Other Side of Empire Drawing showing Columbus encountering Native Americans as he lands in the new world. Courtesy Everett Collection European quests for wealth in the New World led to the spread of warfare and disease with devastating consequences for native inhabitants. Side by side with the lofty ideals of liberty, individual freedom, and the right to selfdetermination that would emerge in this period were far darker events. Soon after Columbus first reached the New World in three small sailing ships, he returned with 17 larger ships full of soldiers and weapons. He installed himself as the governor of the Caribbean Islands and set in motion a process of wealth accumulation for himself and his Spanish sponsors in keeping with the mercantilist logic of that era. This involved enslavement of the native Taino peoples of the island of Hispaniola (today Haiti and the Dominican Republic), seizure of Indian land, and demands of payment as tribute in gold, cotton, and other valuable commodities. In 1517, 25 years after Columbus first arrived on Hispaniola, the Spanish conducted an inquiry into the condition of the indigenous Taino inhabitants of the island. The inquiry found that much of the original population had already been lost to disease, starvation, military conflict, or execution for failure to pay tribute. Within months of the inquiry, a smallpox epidemic wiped out virtually all of the remaining Taino inhabitants of Hispaniola (Cook, 2002). In the decades that followed, other European explorers would launch equally violent and destructive campaigns against native peoples in North, Central, and South America. The actions of Cortez in Mexico and Pizarro in Peru were also driven by a quest for wealth and gold. While some members of the clergy and colonial officials sought to emphasize a civilizing role in the New World, the overall impact of disease and warfare was devastating to native peoples during this period (Sale, 1990). An equally violent set of events involved the European enslavement of an estimated 12 million Africans for shipment to the New World (Ervin & Smith, 2008). The establishment of sugar, cotton, and other plantations drove the need for slaves. Though originally worked by enslaved native Indians, their susceptibility to new diseases led European powers to bring African slaves to work in their place. The trans-Atlantic African slave trade involved the Portuguese, the Spanish, the Dutch, the French, the British, and Americans in a triangular system of exchange. Slaves were brought from Africa to the New World where they were exchanged for gold, silver, cotton, or other products from the Americas. These products were then brought to Europe and traded for finished, manufactured products like textiles and guns. These products were then brought to Africa to be traded for slaves. Although the trans-Atlantic slave trade would continue well into the 19th century, the start of the Industrial Revolution in the late-18th century would begin to change the relative need for human labor in production. The next era of globalization would see dramatic changes in technology, communication, transport, and ideas about trade and exchange that would bring even more regions of the world into a globalized network. The Industrial Revolution and the Rise of Free Trade, 1800–1945 The Industrial Revolution was an evolutionary process that occurred unevenly over the course of many decades. New technologies were developed and adopted in some places while completely bypassing others. Nevertheless, over the course of the 19th century and into the early decades of the 20th century, new inventions in productive technologies, transportation, and communication triggered a new phase in the scale and geographic breadth of globalization. This period corresponds roughly with what Thomas Friedman (2006) calls "Globalization 2.0." Beyond technological advances, new thinking on trade and economic policy also profoundly affected globalization during this period, as did the migration and movement of tens of millions of people around the world. By late in this period, from roughly 1920 to 1940, the world pulled back from globalization and plunged into worldwide recession. This period was also characterized by another unpleasant irony of an increasingly globalized, integrated world—two world wars that left tens of millions dead. Drawing showing women and children operating textile machinery in a factory in 1835. SSPL/Getty Images The Industrial Revolution had its roots in England's textile mills, where steam engine powered machinery greatly increased productivity. The earliest phases of the Industrial Revolution were concentrated in England's textile industries beginning around 1750. Because nearly all of the raw material (cotton) required by this industry had to be imported, expansions in production spurred by new technologies created a need for increased trade and imports. Likewise, increased production had to be sold, so export markets for England's textiles had to be found or created. Probably the most important technological advance of this early phase of the Industrial Revolution was the application of the steam engine to the production of textiles. Instead of relying on waterpower, which limited the location of textile mills, steam engines allowed mills to be located almost anywhere and greatly sped up their automation and productivity. From 1803 to 1833 the number of looms weaving fabric in England increased from 2,400 to over 100,000 (Hills, 1993). And by the 1830s textiles accounted for more than 70% of England's exports (Osterhammel & Peterson, 2005). Increased utilization of the steam engine and other technological advances in other industries around the world likewise sped up demand for raw materials and the volume of finished goods that had to be marketed. By itself, increased production and output might not have automatically resulted in increased trade and exchange. However, another key set of technological advances during this time made the movement of increased production much easier and less expensive. Specifically, advances in both transportation and communication facilitated a rapid increase in the volume and types of goods that could be traded globally. The steamship was first introduced in 1807 and the steam locomotive in 1825 (Rennen & Martens, 2003). By the 1830s steamships began making regular transatlantic voyages, and by the 1850s they were sailing from Europe to Asia (Osterhammel & Peterson, 2005). The opening of the Suez Canal in 1869 (linking the Mediterranean Sea to the Red Sea and the Indian Ocean) cut in half the amount of time it took to travel from England to India. Meanwhile, rapid expansion and utilization of railroads brought new supplies of raw materials from interior regions to the coasts and enabled the movement of imported finished products from the coasts to the interior. Questions of what to transport and when to transport it were made easier due to simultaneous advances in the development of communication systems. Samuel Morse (1791–1872) first patented the telegraph in 1839; by 1866 there was regular transatlantic telegraph service in place, and by 1880 a telegram could be sent from London to virtually anywhere in the British Empire (Osterhammel & Peterson, 2005). For the first time in human history the speed of communication was decoupled from the speed of transportation. Textile merchants in England could learn of cotton prices in different parts of the world and place orders almost instantaneously. And contracts for goods and even financial exchanges could be worked out in hours instead of weeks or months. The Rise and Fall of Free Trade The combination of technological advances in the production of goods and the ability to transport and communicate about those goods represented a synergy of two different processes. A synergy is when two things combine to create a total effect greater than the sum of their individual effects. We can add one more factor to the synergy of production, transportation, and communication advances. Over the course of the 19th century, new ideas about trade and exchange began to replace the mercantilist logic that had dominated economic thinking up to that point. Instead of viewing trade with other nations as a zero sum proposition, more liberal ideas about the benefits of free trade began to emerge. The writings of economist David Ricardo (1772–1823) demonstrated how trade between nations tended to promote greater specialization and increases in production. Statesmen like Richard Cobden (1804–1865) of England pushed these ideas in the political realm and successfully lobbied their national governments to lower or eliminate tariffs on imported goods as a means of encouraging greater trade. The liberal free trade view was even promoted as a means of reducing warfare and conflict between nations. Between 1800 and 1913 the volume of world trade increased by a factor of 25, while the monetary value of that trade consistently grew faster than overall economic output (Held, McGraw, Goldblatt & Perraton, 1999; Osterhammel & Peterson, 2005). Also growing in prominence at this time were the writings and ideas of Karl Marx (1818–1883). Like the liberal free traders, Marx considered the workings of the state to be of secondary importance. Instead, he viewed world events as being driven by a capitalist system that had a logic and momentum of its own. In Marx's view this capitalist system served the interests of the wealthy or the bourgeoisie at the expense of the working class or the proletariat. Marx's thinking and his focus on global capitalism as a system would influence world systems theory and the ideas of the economic structuralists. In Depth: Karl Marx (1818–1883) Portrait of Karl Marx Photos.com/Getty Images/Thinkstock Karl Marx (1818-1883) Most commonly associated with the establishment of communism, Karl Marx was a prolific and revolutionary intellectual whose influence continues to be felt long after his death. Marx put forth his perspective on social conflict in the 1848 publication, The Communist Manifesto, coauthored with Friedrich Engels. The manuscript opened with the now renowned claim, "The history of all hitherto existing society is the history of class struggles" (p. 34). Marx believed that all social conflict stemmed from inequality between classes: tension between the bourgeoisie, the middle or upper class who owned the means of production, called capital (machines, facilities, end products, for example), and those who worked for them (the proletariat), who owned nothing but their own labor. Marx developed his ideas as he watched the Industrial Revolution unfold in Europe. As industrial processes became assembly lined, the work environment shifted from small, skilled labor shops to unskilled, large-scale factories, where workers toiled for long hours under poor conditions for low wages and few benefits. Not only did the working class not materially profit from such an arrangement; as their jobs become unskilled and unspecialized, they were divorced from their own labor. Whereas previously a shoemaker might have crafted a shoe from sole to lace, in the new factories, work was divided up and standardized, so that each worker was in charge of one piece of the process—one might fit soles, over and over again; another, glue laces. Marx suggested that because workers did not own the totality of their product, it was impossible for them to have a sense of pride or ownership over it. Thus, he posited that the capitalist system critically alienates workers from their labor, which is among the most valuable of human assets. While liberal ideas of free trade and universal values of the rights of the individual began to shape the economic policy of this time, realist tendencies to view world events as a struggle for power continued as well. This set up a substantial irony of the time. Between 1880 and 1913 the land area under control of the European colonial powers (mostly England, France, the Netherlands, Germany, Belgium, and Italy) more than doubled from approximately 25 million square kilometers to 53 million (Osterhammel & Peterson, 2005). At its height in the early 20th century, the British Empire alone included over 30 million square kilometers and accounted for over one-fifth of the entire world's population. Figure 1.3: World map of the British Empire during the 1920s Map of the world that shows British Empire territories in the 1920s. The different territories, such as South Africa, India, and Honduras, are colored red and labeled with their former colony names. Maury Aaseng At the height of its colonial power the British Empire stretched across the entire globe and included colonies on every continent except Antarctica. The British Empire was so vast that it was described as the empire on which the sun never sets because there was always part of its empire in daylight. This rapid scramble for colonies in the late-19th and early-20th century represented a second great wave of colonialism following the first wave of the 16th and 17th centuries (see In Depth: Colonialism). Colonialism represents the political and economic control of one group of people by another. Economic and strategic arguments, such as the need to defend trade and communication routes, were often used to defend the practice of colonialism at this time. Even some of the most vocal proponents of economic liberalism at the time also defended colonization of what was perceived as "backward" regions because it would have a "civilizing effect" on the local population. This second wave of colonialism also overlapped with the greatest wave of migration in history. Between 1850 and 1914 an estimated 70 million people migrated from their home country to another region of the world (Osterhammel & Peterson, 2005). Many of these were Europeans migrating to North and South America. The combination of large areas of the world coming under colonial rule and millions of people moving between nations further wove the world together and increased globalization. The last few decades of this period would represent a time of crisis and a retreat from these globalizing tendencies. In 1914 World War I broke out with the Austro-Hungarian invasion of Serbia. Within weeks the German army had invaded Belgium and France, followed quickly by Russia's invasion of Germany. Over the next four years all of the world's great powers would get drawn into the war, and by its end the "war to end all wars" would claim approximately 15 million lives. In the immediate aftermath of the war there were political efforts to try and address its causes and avoid another conflict. In Depth: Colonialism Map showing the 13 British colonies after the 1763 Peace of Paris. Courtesy Everett Collection The United States was originally a collection of thirteen British colonies. The Merriam-Webster Dictionary defines colonialism as the "control by one power over a dependent area or people" . The Persian, Roman, and Ottoman Empires all represented periods of colonial control by one group over another dating back over hundreds or even thousands of years. However, the period from roughly 1880 to 1910 represented a particularly aggressive phase of colonialism with European powers, for example, described as engaging in a "scramble" for Africa (Bryceson, 2002). This period of colonialism was characterized by a number of contradictions. As mentioned, political control over people in colonial territories was occurring at the same time that liberal thinkers were advancing arguments for equality and self-determination. Geographers Piers Blaikie and Harold Brookfield (1987) describe how colonialism both smashed traditional societies and ways of living and then sought to piece them back together in a new fashion. And political scientist James C. Scott (1976) suggests that colonialism created as many problems as it solved. The colonial period of the late-19th and early-20th centuries had a profound impact on the people, economies, and environment of the colonized areas. Furthermore, many of these impacts are still visible today. Blaikie and Brookfield described this period as "the major change of modern times for much of the world" (1987, p. 100). During this time large areas of the world that had been relatively isolated economically were suddenly linked with other regions. Colonial powers sought to extract raw materials, crops, and other commodities from their colonies while also seeing them as markets for their own finished, manufactured products. In order to coax residents of the colonies to grow sugar cane, tobacco, tea, and other cash crops demanded by the colonial powers, taxes were imposed on various aspects of everyday life (Scott, 1976). In order to pay taxes people needed cash, and cash crops offered a way to earn some. Migration and the sale of one's labor for mining, logging, and other extractive industries offered another. In some places, such as East and North Africa, colonial powers engaged in the outright confiscation of millions of acres of farmland, forcing local peasants into paid work on plantations or in mines (Blaikie & Brookfield, 1987). The overriding goal of these colonial policies was to create commercial economies and generate revenue for the maintenance of the colonial system and surplus for the colonial power. Critical Thinking Questions 1. What do you think were the primary motives for the colonization of Africa and other regions by the European powers? 2. In what ways did the colonial period of the late-19th and early-20th centuries represent a contradiction? 3. How might colonial policies of over 100 years ago have lasting impacts on the people, economy, and environment of former colonies today? American President Woodrow Wilson (1856–1924) championed a 14-point plan to promote democracy, the right to self-determination, free trade, and cooperation between nations. This culminated in the founding of the League of Nations in 1919. However, these efforts at cooperation would not last, and the European economies in particular struggled to recover from the devastation of the war. In 1929 the U.S. stock market crash triggered a global economic crisis and the start of the Great Depression. In response, the industrialized countries of the world abandoned free trade policies, increased tariffs or taxes on imported goods, and implemented other protectionist measures to try and shield domestic industry from economic collapse. These moves further aggravated the impacts of the stock market crash and world trade volumes shrunk by over half. Deteriorating economic conditions helped fuel the rise of Fascism in countries like Germany, Italy, Spain, and Japan. Fascism represented an extreme form of nationalism or national self-interest and advocated the use of violence if necessary to defend national interests. This set the stage for the outbreak of World War II in 1939, a global catastrophe that would claim the lives of 65 million people (Ervin & Smith, 2008). In some ways then, the same forces that brought the world ever closer together during this phase of globalization also set the stage for the catastrophic world wars. It would take a new approach at the end of World War II to avoid a repeat of these events and set the world on a new phase of globalization. The Age of Globalization, 1945–Present The United States emerged from World War II as a true global hegemon, or dominant power. Every other great nation involved in the war had seen its infrastructure and productive capacity devastated by conflict, whereas the United States was able to escape this fate. Seeking to avoid the mistakes that set the world on a path to a second world war so soon after the first, the United States and its closest allies began to put in place cooperative international institutions and agreements even before the war had officially ended. The Bretton Woods Conference of 1944 helped to set the stage for the formation of the United Nations (UN) in 1945 as well as the "3 pillars" of postwar cooperation and prosperity. The 3 pillars consisted of the International Monetary Fund (IMF) formed in 1946, the International Bank for Reconstruction and Development (IBRD) formed in 1947, and the General Agreement on Tariffs and Trade (GATT) also finalized in 1947. These organizations were established to speed up postwar reconstruction and to develop systems to avoid the monetary and trade policies that contributed to the outbreak of World War II. They represented a return to a more liberal philosophy of international affairs based on free trade and cooperative approaches to problem solving and dispute settlement. These institutions would also eventually play an important role in the affairs of former colonies. In part because the European colonial powers were so devastated by the war, they found it economically difficult to justify continued control over their colonies in Africa and Asia. For example, Britain granted independence to India, Pakistan, Burma (Myanmar), and Ceylon (Sri Lanka) soon after the war ended. Figure 1.4: World map showing the Eastern Bloc and Western Bloc countries A map that shows the main nation blocs after WWII: The Western Bloc (U.S. and its allies) in green; The Eastern Bloc (Soviet Union and its allies) in red; China and other communist countries in yellow; and the unaligned countries in gray. Maury Aaseng After World War II much of the world was divided into two spheres of influence. The Eastern Bloc was made up of the Soviet Union and many of the countries of Eastern Europe, which allied with the Soviets. The Western Bloc consisted of the United States, most of Western Europe, and other U.S. allies around the world. Although they were allied together against Nazi Germany in World War II, the end of the war saw increasing tensions between the United States and the Soviet Union or the U.S.S.R. This led to the division of much of the world into two competing spheres of influence. The Soviet Union and the Eastern European countries it had occupied at the end of the war formed the "Eastern Bloc" or Warsaw Pact. The United States and its Western European allies like Britain and France formed the "Western Bloc." The standoff between these two blocs would become known as the Cold War. The Cold War lasted roughly from 1946 or the end of World War II until 1991 when the Soviet Union collapsed. It was a period of great political tension, especially since the two powers involved had developed nuclear weapon arsenals capable of destroying the entire planet. These tensions nearly erupted into open warfare on a number of occasions. For example, in 1962 the United States imposed a "quarantine" or blockade on Cuba because the Soviet Union was found to be building nuclear missile launch sites on that island, less than 100 miles from U.S. territory. Although the United States and the Soviet Union avoided direct confrontation during the Cold War era, they engaged in indirect conflict in many regions of the world. For example, in Vietnam the Soviet Union sided with the communist North Vietnamese government while the United States sided with South Vietnam. These situations became known as proxy wars, and they occurred in Asia, Africa, and Latin America. Technology As in the earlier phases of globalization, technology played an important role in further integrating and connecting different regions of the world. The start of the Space Age and the Soviet launch of the Sputnik satellite in 1957 would pave the way for the launch of communication satellites in the years that followed. This allowed for the development of a worldwide telephone network that would not have been possible with groundbased phone cables alone. The invention of the microchip and the microprocessor in 1971 would revolutionize computing and lead to the development of the personal computer. Combined with the creation of computer networks and the development of the Internet, this would result in a quantum leap in the speed and volume of information transferred around the world. Suddenly any individual with access to a computer and Internet connection had a world of information at her or his fingertips, and we had entered an "information age" or what Friedman (2006) would call "Globalization 3.0." Similar advances in transportation allowed greater numbers of people to move around the world like never before. Development of passenger aircraft, like the Boeing 707 in 1958, reduced travel time dramatically and made international travel more affordable. The combination of advances in communication and transportation made the world feel like a smaller place. Mass production of televisions in the 1950s and the spread of Western ideas through movies, music, food, and consumer products was another globalizing force of this time. Brand recognition for products like Coca-Cola and Levi's jeans made them among the first global consumer products. The term global village first came into use in the 1960s—30 years before widespread use of the Internet—to describe a growing global consciousness. This period saw the formation of a number of worldwide efforts to address social and environmental problems. Amnesty International was formed in 1961 to fight against human rights violations, and a global environmental movement with organizations like Greenpeace emerged around 1970 to challenge worsening environmental degradation. The development of global news organizations like BBC World, CNN, and Al Jazeera would further shape a more global perception of world events. Thus the degree of cultural globalization, not just economic and political globalization, became much greater during this time than during earlier phases of the process. A Coca-Cola billboard in Warsaw, Poland Laski Diffusion/Newsmakers/Getty Images As Western ideas spread throughout the world, Coca-Cola became one of the first products to achieve global brand recognition. While the combination of political efforts (e.g., the UN), technological advances (e.g., the Internet), and spreading cultural forces ushered in a true age of globalization, the process has not been without its crises and controversies. Global oil crises in 1973 and 1979 sent shockwaves through many economies and resulted in temporary economic downturns. A global debt crisis occurred in the 1980s when many heavily indebted Latin American countries defaulted on their loans. The recent subprime mortgage crisis that hit the United States in 2007 had ripple effects through global financial markets, leading to a Great Recession in 2008. The terrorist attacks on the United States of September 11, 2001, were motivated at least in part by opposition to a perceived spread of Western cultural influences. Meanwhile, the communications advances of recent decades have enabled groups like Al Qaeda to extend their reach and have global influence. The perception among many critics that globalization represents an agenda to enrich multinational corporations and a powerful elite has also led to a backlash against it. Diverse organizations representing organized labor, the environmental movement, women's rights, and broader social justice and poverty issues have increasingly found themselves allied against institutions like the World Bank and the World Trade Organization (WTO). This opposition was clearly on display during the WTO protests in Seattle in 1999. Increasingly, economic nationalists and right-wing groups opposed to immigration and multiculturalism are also standing in opposition to what they see as globalizing forces. In France the 2012 presidential campaign has seen politicians on the left and the right rail against globalization and even campaign on a platform of "Demondialisation" or "deglobalization" (Haski, 2011). Whether this phase of globalization, like the last, ends in crisis and a withdrawal remains to be seen. What is clear is that the very same historical forces that enable the spread of globalizing processes can also, under other circumstances, undermine it. A Two-Part Explanation of the History of Globalization A two-part PowerPoint presentation by Nayan Chanda of the Yale Center for the Study of Globalization explains the history of globalization and current debates over its impacts. Part 1 and Part 2 The World is Flat 3.0 In this video filmed in 2007 at MIT, Thomas L. Friedman, Pulitzer Prize winning author and columnist, explains his theory about globalization and the issues and challenges of the current era of globalization. Critical Thinking Questions 1. What is Thomas L. Friedman referring to when he states, "The global economic playing field is being leveled, and you Americans are not ready?" How did he come to this idea and what does it mean? 2. According to Friedman, what are the three eras of globalization? Explain. 3. Why is bringing liberal arts backgrounds into the globalization equation crucial in this era of innovation? How does Friedman's example of Steve Jobs illustrate this point? 1.4 Debating the Impacts of Globalization Given the confusion and the "contested" nature of defining globalization, as well as the complex history of this process, it is no surprise that there are equally contentious debates over its impacts. Some observers view globalization as a highly destructive force. They describe it, for example, as the economic conquest of the world by American-style capitalism, the obliteration of local cultures, and the takeover of national politics by unelected UN bureaucrats. Others see value in globalization. The growth in free markets and trade increases wealth, the spread of ideas and culture enriches our existence, and international political cooperation promotes stability and peace between nations (Chanda, 2003). In all of these debates—economic, cultural, political—globalization has become shorthand or an easy-to-use phrase to represent an enormous range of policies, processes, and issues. Ask protesters at an anti-globalization rally what they are protesting and they might reply "capitalism," "the International Monetary Fund," "multinational corporations," or "imperialism." Likewise, proponents of globalization in the media and in business often speak vaguely of "the benefits of trade," "deregulation," "standardization," and "progress." It's instructive then to look at a handful of specific issues that animate those who tend to oppose or favor globalization and see what lies behind their arguments. These ideas are explored only briefly here, but they are the focus of more detailed discussions in the chapters that follow. Economic Impacts of Globalization Economic debates over globalization generally focus on whether more open economies and increased trade between nations is to the benefit of most or all of those involved. Liberal and neoliberal free trade arguments rest on the idea of comparative advantage, that free trade allows nations to specialize in producing those things they are better at and then trade for those things they cannot produce as efficiently. A fairly large body of evidence seems to support this contention—that open trade between nations leads to increased productivity, greater wealth generation, and economic growth. A point of contention, however, and also a major theme of this book, is who benefits the most from these gains and how are they distributed. Overall, an economy might experience growth and increased wealth as a result of liberal trade policies, but if that increased wealth only flows to some while others are made worse off, then these policies will come under fire. Group of Occupy Wall Street Protesters demonstrating in Times Square in New York. Allison Joyce/Stringer/Getty Images Widespread public opposition to perceived inequalities, such as the Occupy Wall Street movement, has led to sometimes violent global protests. Free trade policies and the international institution most closely associated with them, the World Trade Organization (WTO), face just such opposition. It is perhaps ironic that some of the most strident anti-globalization and anti-free trade rhetoric of recent years is coming from groups and individuals in developed countries of the North, including the United States. It was these countries that championed open trade regimes after World War II and who appeared to have benefitted the most from them until only recently. However, increased rates of offshoring and outsourcing appear to be worsening the unemployment situation in these countries. Offshoring refers to a process of companies moving their production systems to another country, usually in search of cheaper labor. Likewise, outsourcing refers to a company subcontracting some portion of their operations, often customer service and tech support, to companies operating in other countries. Such practices are made easier as a result of free trade policies, and improvements in transportation and communication also make them practical and cost-effective. As a result these practices have great appeal to multinational corporations, and they can often lead to significant cost savings and increased profitability. Therefore, when U.S. corporate profits in 2010 rose by $1.7 trillion over the previous year, at the same time that 15 million Americans were unemployed, it set up a situation where free trade policies would come under attack (Chanda, 2011a). It is in this context that a 2007 study by a group called the Financial Services Forum takes on significance. The Forum is made up of the chief executives of 20 of the world's largest financial companies, including Citigroup and Wachovia, and top economic advisers to Presidents Clinton and Bush wrote the report. Given who sponsored and wrote the report it's perhaps not surprising that it found, overall, that globalization is good for the U.S. economy (Wessel, 2007). However, the report went on to warn that the gains from globalization are not being shared evenly enough, and that in order to avoid a popular backlash governments and businesses must find ways to ensure that the benefits of globalization are distributed more equally. The fear is that a business-as-usual approach to trade policy could heighten economic anxiety and result in widespread public opposition to policies associated with economic globalization. This, in fact, already appears to be happening in places like France with calls for "deglobalization" and in the United States with the Occupy Wall Street movement. 1.5 Cultural Impacts of Globalization Citizens performing a dragon dance to celebrate Chinese new Year in Beijing. Travel Pix Collection/Jon Arnold Images/SuperStock Some scholars suggest that globalization helps to maintain local cultures by encouraging people to celebrate and preserve local traditions. Globalization has significant impacts on local and regional cultures. A fundamental criticism of globalization is that it displaces rich, local cultural heritage with a single, homogenized version. Furthermore, that single globalized sense of culture is determined largely by those with the most power, namely countries of the North and in particular the United States. Thus globalization is described as a process of "cultural imperialism" and labeled the "McDonaldization" or "Coca Colanization" of the world. Entertainment media, from movies to music, is dominated by Western (e.g., Hollywood) influences and undermines local forms of entertainment and values. The global news media is also dominated by Western views through CNN and the BBC. Consumer tastes and preferences for food, clothing, and other products are shaped by multinational corporations through aggressive advertising and tend to also promote the spread of Western consumer culture. Taken together, these forces are criticized as making the world a less diverse and interesting place, replacing a rich tapestry of languages, cuisine, art, and beliefs with a bland canvass of sameness. While acknowledging the homogenizing tendencies of globalization, some scholars suggest that it can also enrich and strengthen local cultures while creating new hybrid cultures in the process (Lechner & Boli, 2004; Rigg, 2007). One reason for this is that imported ideas and approaches tend to be shaped and modified to fit local conditions. For example, while fast food chains like McDonald's and Kentucky Fried Chicken are spreading across the world, they often adapt their menu to better fit local tastes. In Japan, for instance, McDonald's offers items like a shrimp wrap and a teriyaki burger. A second reason is that globalization often provokes reactions and spurs people to undertake efforts to preserve and celebrate their local culture and heritage. Sometimes this can take the form of an extremist reaction, such as in efforts to enforce religious law as a backlash against the perceived secularizing tendencies of Western influences. In other cases it can take the form of efforts to preserve and promote the uniqueness of local culture, such as through cultural tourism, ethnic music and dance festivals, and other cultural celebrations (see Country Case Study: Cultural Tourism in Laos). A third consideration is that globalization itself has created both the technological means and the political conditions for grassroots efforts to preserve local culture and identity (Rigg, 2007). For example, there are several international organizations such as Survival International and First Peoples Worldwide dedicated to protecting the rights and preserving the culture of indigenous groups around the world. These organizations make effective use of the Internet and global media outlets to convey their message to as wide an audience as possible. Overall, globalization creates conditions that simultaneously work to undermine some aspects of local culture and identity while preserving others. Political Impacts of Globalization At the heart of the debate over the political impacts of globalization is whether this process is substituting the power of global institutions and multinational corporations for national governments and undermining national sovereignty and even democracy in the process. Some critics of globalization would even go as far as to say that it will result in the end of the nation-state system as we know it. This is said to be happening for at least two interrelated reasons. First, the combination of free trade policies, advances in transportation and communication, and the globalization of world financial markets has allowed multinational corporations to shift their production and other operations almost anywhere in the world. These corporations have become highly mobile and operate in what some are calling a "borderless world" (Bardhan, 2011). Because of this, national governments might feel constrained in regulating, for example, the labor or environmental practices of these corporations for fear that it might drive them to shift their operations to another country. Whereas an elected national government might place a high priority on things like a minimum wage, safe working conditions, or pollution prevention, they might also recognize that pursuit of these goals could make their country less competitive. This is said to result in a "race to the bottom" wherein countries have to back away from domestic political priorities to remain competitive in a globalized marketplace. The second related argument is that the global institutions tasked with creating rules for things like international trade and finance have assumed too much power in the process. For example, the World Trade Organization sets the rules for the global trading systems and also settles disputes in cases of violations of those rules. However, there have been a number of instances (see section 4.2) in which the WTO found domestic policies in violation of global trade rules, leading to the argument that democratically elected national governments are being overruled by unelected bureaucrats at an international institution. Country Case Study: Cultural Tourism in Laos Map of Laos and surrounding countries. Maury Aaseng Few countries of the world were as immune to globalization in recent decades as the small, landlocked Southeast Asian nation of Laos. After being colonized by France in 1893, Laos achieved formal independence in 1954. However, in the years that followed, Laos would suffer from civil war and internal political instability. In the 1960s during the Vietnam War the country was subject to intensive aerial bombardment by the United States because the North Vietnamese used Laotian territory for their supply routes. By 1975, the communist Pathet Lao overtook Laos, and it remained largely isolated from the outside world. By the late 1980s, with Soviet communism weakening, the Lao government began to introduce market reforms and slowly open the country to outsiders. Between 1990 and 2006 the number of tourists visiting Laos increased from 14,000 to over 1.2 million (Lao National Tourism Administration, 2007). One of the top tourist destinations in Laos is Luang Prabang, the former royal capital of the country. The 250,000 foreign tourists who visited it in 2010 could find no trace of McDonald's, Starbucks, or signs for Coca-Cola or Pepsi anywhere in the city (Chanda, 2011b). Visitors are attracted to Luang Prabang because the town has preserved and protected its cultural heritage. This "cultural tourism" has not only allowed the residents of the town to preserve their landscape and way of life, it has also strengthened the local economy. Over the past five years tourism has generated close to $300 million in revenue, and the average per capita income has increased from $350 in 2005 to $821 in 2010 (Chanda, 2011b). The story of Laos and the development of cultural tourism in that country illustrate a number of points discussed in this chapter. Laos's history and economy were shaped for a period by French colonization of the country. In the 1960s and 1970s it suffered as one of the locations of a proxy war between the United States and Soviet Union. After a period of isolation, Laos has recently begun to open up to the outside world. The forces of globalization, communication, travel, and market exchange are bringing new ideas, opportunities, and challenges to Lao society. And yet the Lao people are trying to find a way to make tradition and local culture a source of attraction to global visitors. The resulting experiment in cultural tourism illustrates the contested and contradictory nature of many things associated with globalization. Critical Thinking Questions 1. Do you think cultural tourism really represents a viable way to maintain cultural traditions? 2. Critics of cultural tourism argue that it represents the "commodification" or "selling out" of local cultures. What do you think? 3. Can you think of a place that you are from or where you have lived that might be able to develop a program of cultural tourism? Others, however, would argue that globalization is helping to spread democratic ideals. Explosive growth in the Internet and in satellite communications has contributed to the diffusion of ideas and linked groups pursuing similar goals around the entire world. The political transformation of the Middle East that began in 2010 and has become known as the "Arab Spring" represents one example of this. Antigovernment protesters in Egypt, Libya, Syria, Tunisia, and elsewhere have all drawn inspiration and ideas from one another. What in the past might have been mainly a localized or at most national movement has now spread across boundaries and is transforming an entire region. In terms of criticism of the WTO and other international institutions as undermining national sovereignty and democracy, supporters counter with a number of points. First, these institutions are member organizations that operate on behalf of member nationstates. In this way they do represent, at least in an indirect way, the interests of citizens of member countries. Second, the WTO, as an example, strives to make national trade policies as transparent and open as possible so that differences between them can be negotiated. In the process, this empowers citizens of individual countries to examine and question those policies and whose interests they might serve. In the end, supporters of greater international political cooperation and globalization would argue that these things sometimes require nation-states to subsume their own self-interests in pursuit of what is considered to be the greater good. Middle East 2010 Political Timeline This interactive timeline provides information on various political events that have occurred in different countries of the Middle East since December of 2010. Timeline of Globalization Chapter Summary Although there probably always will be debate over what globalization means, when it started, and what its impacts are, there can be little argument about its actual existence. The world today is a far more integrated, "flatter" and "smaller" place than most people could have even imagined just a generation ago. The world has reached this point through the complex interaction of changes in politics, culture, economics, and technology. The variety of factors that contribute to and shape globalization helps explain why this remains such a complicated and controversial topic. Theories of globalization offer some insight into the historical processes that led to the globalized world we live in. Realism, for example can be used to understand why countries might shun cooperation and pursue a more narrow conception of self-interest. Liberalism helps explain why countries might, in contrast, give up some national sovereignty in the interests of greater cooperation. Yet both of these theories can be seen to operate in the same country at the same time. China, for instance, this year celebrates the 10th anniversary of its membership in the World Trade Organization, a move that represents a trend toward liberalism. However, in return for joining, China was able to negotiate a series of special conditions that protect its own domestic markets from foreign competition, a very realist strategy. The result has been rapid growth in the Chinese economy, now the second largest in the world after the United States, and massive trade imbalances as China exports far more than it imports. The future of globalization is also an area of much uncertainty. Because globalization is perceived by some to undermine local culture and national sovereignty, there is always the possibility for a backlash when economic or other conditions deteriorate. Offshoring of many manufacturing jobs from developed countries of the North to developing countries of the South represents one possible source of backlash. Residents of developed countries that earlier benefitted from more open markets and globalizing forces are now protesting to save their jobs and livelihoods. While it seems unlikely or even impossible that globalization, in all its forms, could be slowed or stopped by such a backlash, the uneven economic impacts of this process have made it a favorite target of populist political movements. It would be just as difficult now to predict the future of globalization as it would have been 100 years ago to predict where we are today. Yet an understanding of the forces that got the world to this point and that continue to shape the processes of globalization can help scholars understand events as they unfold. Chapter Highlights * Defining globalization is difficult because it has technological, economic, political, and cultural elements associated with it. * At a basic level we can say that globalization is a process of increased integration of peoples, economies, cultures, and other facets of life. * Globalization involves the shrinking of space through advances in transportation and the shrinking of time through advances in communication and computing. * A variety of theoretical perspectives, including realism, liberalism, world systems theory, and economic structuralism can be used to better explain and understand the history of globalization and world affairs. * Globalization can be studied in distinct historical phases, from the first globalizers of ancient times to modern forces like satellite communication and global trade and finance systems that link distant regions of the planet together. * The impacts of globalization can be debated on a number of grounds. Economically, globalization is argued to increase trade and overall wealth, but how that wealth is distributed and who benefits from it is a source of contention. * Culturally, some argue that globalization leads to the loss of unique cultures while others note the ways in which it can be used to protect and celebrate those cultures. * Politically, globalization sets up difficult choices for countries in terms of weighing the benefits of increased cooperation and integration against the potential loss of national sovereignty and control over their own internal affairs. Key Terms Click on each key term to see the definition. anarchical system A system tending toward anarchy or a state of disorder. bourgeoisie The capitalist class that owns the means of production. colonialism The political and economic control of one group of people by another. contested concept An idea that does not have a fixed or easy definition. economic structuralism A belief that the economic structure, and particularly class relations in society and between societies, determines political and historical trends. Fascism A system of government characterized by authoritarian control and economic nationalism. globalization The integration of peoples, economies, cultures, technology, and other facets of everyday life. hegemonic power A state that exercises more power than others. liberalism A theory based on the importance of free markets and a belief or hope that independent states will find it in their best interests to cooperate with one another. mercantilism A belief that the interests of the state were best served by protection of domestic industries and the promotion of exports as a means to accumulate gold and silver. neoliberal Contemporary followers of liberal theory. offshoring A process of companies moving their production systems to another country, usually in search of cheaper labor. outsourcing A company subcontracting some portion of their operations, often customer service and tech support, to companies operating in other countries. proletariat The working class. realism A theory based on the idea that relations between states are based on a struggle for power and the pursuit of self-interest. states Governed entities or nations. tariffs Taxes on imported goods. World Systems Theory (WST) A theory that seeks to explain global economic inequality through a historical analysis. zero sum principle The idea that increased wealth and power for one state could usually come only at the expense of another. Critical Thinking and Discussion Questions 1. Why is the term globalization a contested concept, and how does our text define globalization and its numerous contexts? 2. What are positive, normative, and critical perspectives in terms of discussing political and global theoretical perspectives? How can a perspective—such as liberalism—be defined as having more than one of these dimensions at a time? 3. What ramifications did indigenous populations incur during the Age of Empire, 1500–1800, and in subsequent colonial waves? 4. What was the Trans-Atlantic Slave Trade, why did it develop, and how did it operate? 5. What are Karl Marx's views of capitalism and the roles of the bourgeoisie and the proletariat? Self-Assessment Quiz The following quiz is for your own review and will not affect your grade.