What is Globalization? 2.

Skeptical
3. Transformationalist.
Globalization
• is a process of increasing social
and economic integration among Globalization theory
countries around the world. • is widely seen to have started in
• It involves greater cooperation the 1980s and was characterized in
between people, governments, and this early period by admiring
companies to make international accounts of the globalization of
trade easier—for example, through economy, politics, and culture and
treaties like free trade agreements. the sweeping away of the
• a term used to describe how trade significance of territorial
and technology have made the boundaries and national
world a more connected and economies, states, and cultures
interdependent place. (Martell Citation2007).
• is the growing interdependence of
the world’s economies, cultures,
and populations, brought about by Hyperglobalist
cross-border trade in goods and • It sees globalization as a unique,
services, technology, and flows of entirely lawful, and progressive
investment, people, and process of unification. It
information. conceptualizes globalization as a
‘leveler’ that helps to create
economic and social opportunities
The History of Globalization Is Driven by that would otherwise have not
Technology, Transportation, And existed.
International Cooperation • E.g., if governments allow
organizations the freedom to ‘do
In the 19th century global business,’ wealth will be
integration take off. Following centuries generated, which will trickle down
of European colonization and trade to everyone. Holton (Citation2005)
activity, that first “wave” of globalization • Argues that national governments
was propelled by steamships, railroads, have much less socio-political
the telegraph, and other breakthroughs, influence or even none.
and by increasing economic cooperation
among countries. Skeptical
The globalization trend eventually • A more somber set of accounts
waned and crashed in the catastrophe of reacted by arguing that
World War I, followed by postwar, the globalization is neither new nor
Great Depression, and World War II. After progressive.
World War II in the mid-1940s, the United • is concerned with the abstract
States led efforts to revive international nature of globalist ideas, which are
trade and investment under negotiated thin on empirical substantiation
ground rules, starting a second wave of and make sweeping claims about
globalization, which remains ongoing, processes as if they affect all areas
though buffeted by periodic downturns of the world evenly and with the
and mounting political scrutiny. same responses.
• It draws on evidence of the
Three key perspectives in continuing role of nations and the
globalization theory ongoing importance of national
1. Hyperglobalist borders.
 • The skeptical perspective also cultural exchange is not unilateral
highlights that the world has seen from West to East but rather a two-
greater, rather than lesser, way exchange in which Western
nationalism in many places, often culture is also changed and
in response to the perceived and influenced. Through this process, a
real threats of globalization. new and complex social order is
• The integration into a single global appearing in the world.
economy is a ‘declaration of
cultural war’ upon other cultures These three perspectives have
and societies and it often results in subsequently been widely used to help
profound social disruption. provide social scientists with a
• The skeptical perspective, then, framework for thinking about
challenges the consequences, globalization.
ubiquity, and sustainability of
globalization. Economic Globalization
• defined as the process in which
Cultural globalization - refers to the businesses, organizations, and
overwhelming dominance of one culture. countries begin operating on an
international scale. Globalization is
Transformationalist most often used in an economic
• Referred as the ‘third wave’ of context, but it also affects and is
globalization theory (Martell, affected by politics and culture.
2007). • In general, globalization has been
• A third perspective recognizes shown to increase the standard of
some validity of both the living in developing countries, but
hyperglobalist and skeptical some analysts warn that
perspectives that emerged in the globalization can hurt local or
earliest periods of globalization emerging economies and individual
analysis. workers.
• It suggests that whilst a critical
assessment of the claims of Historical view
globalization is needed, one should • Globalization is not new. Since the
not ‘throw out the baby with the start of civilization, people have
bathwater.’ traded goods with their neighbors.
• The outcome of this has been the
recognition of a more complex The Silk Road
picture of globalization, as • an ancient network of trade routes
described by the prominent used between Europe, North Africa,
sociologist, Anthony Giddens East Africa, Central Asia, South
(Citation1990). Asia, and the Far East,
• The transformationalist perspective • is an example of early
frames the process of globalization globalization. For more than 1,500
as uneven and uncertain, insisting years, Europeans traded glass and
on its multidimensionality. manufactured goods for Chinese
silk and spices, contributing to a
Hyperglobalist vs transformationalist global economy in which both
• Globalization is seen as occurring Europe and Asia became
but without just sweeping all away accustomed to goods from far
before it, as hyperglobalists might away.
have it. Instead,
transformationalists argue that Columbian Exchange
 • Following the European exploration companies in India. The result is
of the New World, globalization more jobs in countries where jobs
occurred on a grand scale, the are needed, which can have a
widespread transfer of plants, positive effect on the national
animals, foods, cultures, and ideas. economy and result in a higher
The Triangular Trade networks standard of living.
• in which ships carried • Vietnam, where globalization has
manufactured goods from Europe contributed to an increase in the
to Africa, enslaved Africans to the prices for rice, lifting many poor
Americas, and raw materials back rice farmers out of poverty.
to Europe is another example of • Consumers benefit also. In general,
globalization. globalization decreases the cost
• The resulting spread of slavery of manufacturing.
demonstrates that globalization • Consumers also have access to a
can hurt people just as easily as it wider variety of goods.
can connect people.
Downsides
Advances in communication - enable • workers in the developed world
businesses to identify opportunities for must compete with lower-cost
investment. markets for jobs; unions and
Innovations in information technology - workers may be unable to defend
enable immediate communication and against the threat of corporations
the rapid transfer of financial assets that offer the alternative between
across national borders. lower pay or losing jobs to a
Improved fiscal policies within countries supplier in a less expensive labor
and international trade agreements market.
between them also facilitate • The garment industry in
globalization. Political and economic Bangladesh, for instance, employs
stability facilitate globalization as well. an estimated four million people,
The relative instability of many African but the average worker earns less
nations is cited by experts as one of the in a month than a U.S. worker
reasons why Africa has not benefited earns in a day. In 2013, a textile
from globalization as much as countries factory building collapsed, killing
in Asia and Latin America. more than 1,100 workers.
• increase negative impacts of child
Benefits labor and lure children of poor
• provides businesses with a families away from school.
competitive advantage by allowing • contribute to income disparity and
them to source raw materials inequality between the more
where they are inexpensive. educated and less educated
• gives organizations the opportunity members of a society. This means
to take advantage of lower labor that unskilled workers may be
costs in developing countries, while affected by declining wages, which
leveraging the technical expertise are under constant pressure from
and experience of more developed globalization.
economies.
• different parts of a product may be What Is a Multinational Corporation
made in different regions of the (MNC)?
world. • is a company that has business
• outsourced their call centers or operations in at least one country
information technology services to other than its home country. By
 some definitions, it also generates least a quarter of their revenue
at least 25% of outside of their home country.
its revenue outside of its home
country. Advantages
• has offices, factories, and other • Developing an international
facilities in different countries presence can open new markets
around the world as well as a and sales opportunities unavailable
centralized headquarters that or not feasible when operating just
coordinates global management. domestically.
• be known as international, • For example, a presence in a
stateless, or transnational foreign country such as India can
corporate organizations or allow a corporation to meet
enterprises. Some may have widespread Indian demand for
budgets that exceed those of small products without the transaction
countries. costs associated with long-distance
• A multinational company is defined shipping.
as a company that operates • Corporations can establish
production facilities and holds operations in markets where their
assets in at least one country other capital can be used most
than its home country. efficiently, and wages have less
impact on the bottom line than
Key Takeaways they did in the home country.
• Multinational corporations conduct • By producing the same quality of
business in two or more countries. goods at lower costs, multinational
• Some consider a multinational companies can reduce prices and
company to generate 25% or more increase the purchasing power of
of its revenue outside the home consumers worldwide.
country. • Multinational companies can also
• An MNC can have a positive take advantage of lower tax rates
economic effect on the countries in available in countries eager for
which it operates. their direct investments and the
• Some believe that outsourcing from jobs that they'll create.
the U.S. manufacturers to a foreign • Other benefits include direct
country hurts the U.S. economy. financial investment in foreign
• Investing in a multinational countries and job growth in their
corporation is a way to add local economies.
international exposure to a
portfolio. Disadvantages
• A trade-off of globalization—the
How a Multinational Corporation price of lower prices—is that
Works domestic jobs move overseas. This
• A multinational corporation is an can increase unemployment in the
enterprise whose business home country and make it difficult
activities occur in at least two for longtime employees in
countries. outsourced industries to find new
• Some may consider any company jobs.
with a foreign branch to be • Those opposed to multinational
a multinational corporation. Others corporations point to the potential
may limit the definition to only they may have to develop
those companies that derive at a monopoly (for certain products).
This can drive up prices for
 consumers, stifle competition, and nations, putting them at a greater
inhibit innovation. disadvantage on the world stage.
• Multinational corporations are also
said to have a detrimental effect on North-South Divide:
the environment because their • (or Global North and Global South)
operations may encourage land is a socio-economic and political
development and the depletion of division of Earth popularized in the
local and natural resources. late 20th century and early 21st
• Multinational companies may also century.
cause the downfall of small, local • Definitions of the Global North
businesses. Activists have also include the United States, Canada,
claimed that multinational all the European countries, Israel,
companies breach ethical rules. Cyprus, Japan, Singapore, South
Korea, Taiwan, Australia, and New
Zealand.
International Trade • The Global South is made up of
• International trade is the purchase Africa, Latin America and the
and sale of goods and services by Caribbean, the Pacific Islands, and
companies in different countries. the developing countries in Asia,
Consumer goods, raw materials, including the Middle East. It is
food, and machinery all are bought seen as home to: Brazil, India, and
and sold in the international China, which, along with Indonesia
marketplace. and Mexico, are the largest
• International trade allows countries Southern states in terms of land
to expand their markets and area and population.
access goods and services that • The North is mostly correlated
otherwise may not have been with the Western world, while the
available domestically. As a result South corresponds with the
of international trade, the market is developing countries (previously
more competitive. called the "Third World") and the
• This ultimately results in more Eastern world.
competitive pricing and brings a • The two groups are often defined
cheaper product home to the in terms of their differing levels of
consumer. Some countries engage wealth, economic development,
in national treatment of imported income inequality, democracy,
goods, treating them the same as and political and economic
those same products produced freedom, as defined by freedom
domestically. indices.

- Trading globally allows consumers Global North

and countries to be exposed to • States that are seen as part of the
goods and services not available in tend to be wealthier, less unequal,
their own countries, or more and considered more democratic
expensive domestically. and developed countries that
- The importance of international export technologically advanced
trade was recognized early on by manufactured products.
political economists such as Adam
Smith and David Ricardo. Southern states
- Still, some argue that international • are poorer developing countries
trade can be bad for smaller with younger, more fragile
democracies heavily dependent on
 primary sector exports and structural transformation of the
frequently share a history of past world system of international
colonialism by Northern states. relations and the emergence of
new global political actors, an
Nevertheless, the divide between the increase in the political
North and the South is often challenged interconnection and
and said to be increasingly incompatible interdependence between them,
with reality. In economic terms, as of and the creation of a global
the early 21st century, the North—with political architecture and hierarchy.
one-quarter of the world population—
controls four-fifths of the income earned Some examples of political
anywhere in the world. 90% of the globalization include:
manufacturing industries are owned by  Organizations like the United
and located in the North. Inversely, the Nations and NATO intentionally
South—with three-quarters of the world connect global governments, as
population—has access to one-fifth of well as mitigate international,
the world's income. political current events
 The Russia-Ukraine War and its
effects on global economies, supply
Political Globalization chains, and prices
 is a type of globalization that  The shift of power from individual
involves countries’ policies that governments to international
promote the globalization of corporations like the World Bank
governments, economies, and and World Trade Organization
cultures. (WTO)
• Some have argued that it has also  Spread and homogenization of
led to a declining role of nation- government types, such as
states, which have ceded some democracy.
power and responsibility to  Governments implementing free
international bodies. For example, trade policies to promote a global
many nations agree to accept the economy
rulings of the International Court of  Multinational agreements that
Arbitration even if they disagree allow for globalization, such as
with them. double taxation treaties
• is a dynamic, nonlinear, global  Increased ability to immigrate to
process of increasing and new nations
complicating the interdependence
between all elements of the global The benefits of political
political system. globalization
• It is the increasing political  International cooperation
integration of nation-states since  Ease of movement for global
the 2nd World War. citizens
 Ease of trade
Political globalization has resulted in
what we now know as the worldwide The Downsides of political
political system globalization
• unwanted government
Global political processes intervention,
• are processes taking place in the • the influence of unelected leaders
context of the political aspect of (such as U.N. members),
globalization, resulting in the • fragile political webs.
 • Political globalization describes
Disadvantages of Political the ways political decisions are
Globalization increasingly made at a global
1. Loss of Power at the Nation-State rather than national level. While it
Level has enabled some significant
2. Levels of Bureaucracy advancements in human rights
3. Decreased Political Accountability and growing prosperity thanks to
free trade, many people have
1. Loss of Power at the Nation- been displaced and harmed by
State Level multinational agreements, also.
When nation-states make • There will always be a pull-and-
multinational agreements, they push as political globalization
often make concessions to reach a displaces and upsets people and
middle ground that’s satisfactory causes backlash.
to all parties. They also sign off on
certain norms and standards that Advantages Of Political
restrict their abilities to Globalization
unilaterally act. 1. Establishment of International Norms
2. Ease of Movement
2. Levels of Bureaucracy 3. Ease of Trade
Multinational political 4. Establishment of Blocs of Influence
agreements can add extra layers 5. Solve Global Problems like Climate
of bureaucracy to the everyday Change
activities of businesses and
citizens. For example, many global 1. Establishment of International
political agreements put in place Norms
standards that you need to ‘tick - When nation-states sign treaties
off’ before sending a product to with international bodies, it’s an
market. Another way they increase agreement to operate within a set
bureaucracy is through the very of norms and standards that all
fact the running and signatories will adhere to.
administration of multinational - This rule-based order can help
agreements is a burden. prevent a race to the bottom
regarding labor standards,
3. Decreased Political intellectual property theft, and
Accountability environmental standards.
One of the biggest critiques An example of this is the
of bodies like the WTO, the EU, establishment of war crimes
and the United Nations is that standards that are policed by the
they are full of unelected International Criminal Court in
bureaucrats. The decisions made Brussels.
in multinational agreements are
(in their very nature) made not 2. Ease of Movement
only by citizens of your nation but - Often, political agreements
also by leaders of competitor between nations lead to the
nations. These foreign leaders are relaxing of the movement of labor
in no way accountable to you or across boundaries. This can lead
your fellow citizens. to immigration
and emigration opportunities for
Conclusion millions of people.
 - The most dramatic example of this as the United Nations and World
is the freedom of movement of Trade Organizations because they
people around the 27 European effectively created a strong trans-
Union nation-states, leading to Atlantic alliance.
the development of a 5. Solve Global Problems like
transnational European identity. Climate Change
- However, in many other cases, - As the 21st Century progresses,
this ease of movement is often the problem of climate change
limited to highly educated becomes more pressing to solve.
professionals and locks out - They will often cite that they’re
working-class people from only responsible for a tiny
the benefit of globalization. percentage of global carbon
emissions.
3. Ease of Trade - In this context, an effective way to
- One of the key goals of political solve climate change is to create a
globalization is to create better global pact where all nations
trade routes around the world. (which each account for only a
- The premise here is that free trade small amount of carbon emissions)
creates more efficient economies come together and agree to
of scale. targets and standards for reducing
In a free trade situation, nations emissions.
that are excellent at producing a - Attempts have been made to
certain product or service will address this – such as in the
become global ‘hubs’, producing Copenhagen and Paris Climate
their product of expertise with Accords, although it’s widely
great efficiency and at scale. believed that these accords fall far
- This can free up other nations to too short and will not prevent
produce other products more catastrophic climate
efficiently also because they will change. Nonetheless, if this
be able to re-allocate resources to problem is solved, it’s likely to
industries, they’re more efficient only occur at a global
at working within. multinational level.
- increase participatory nations’
prosperity significantly, although
this often comes at the cost of
jobs in vulnerable sectors

4. Establishment of Blocs of
Influence
- Multinational political agreements
are often designed to create a bloc
of allies that are stronger than the
sum of their parts.
- One example of this is when small
African and Pacific nations gather
together to vote as blocs in the
United Nations.
Similarly, the West spent the
2nd half of the 20th Century
holding significant leverage over
multinational organizations such