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transnational corporations, national currencies, economic efficiency, IMF, WTO
Globalization, comprehensive term for the emergence of a global society in which economic, political, environmental, and cultural events in one part of the world quickly come to have significance for people in other parts of the world. Globalization is the result of advances in communication, transportation, and information technologies. It describes the growing economic, political, technological, and cultural linkages that connect individuals, communities, businesses, and governments around the world. Globalization also involves the growth of multinational corporations (businesses that have operations or investments in many countries) and transnational corporations (businesses that see themselves functioning in a global marketplace). The international institutions that oversee world trade and finance play an increasingly important role in this era of globalization.
Although most people continue to live as citizens of a single nation, they are culturally, materially, and psychologically engaged with the lives of people in other countries as never before. Distant events often have an immediate and significant impact, blurring the boundaries of our personal worlds. Items common to our everyday lives—such as the clothes we wear, the food we eat, and the cars we drive—are the products of globalization.
Globalization has both negative and positive aspects. Among the negative aspects are the rapid spread of diseases, illicit drugs, crime, terrorism, and uncontrolled migration. Among globalization’s benefits are a sharing of basic knowledge, technology, investments, resources, and ethical values.
The most dramatic evidence of globalization is the increase in trade and the movement of capital (stocks, bonds, currencies, and other investments). From 1950 to 2001 the volume of world exports rose by 20 times. By 2001 world trade amounted to a quarter of all the goods and services produced in the world. As for capital, in the early 1970s only $10 billion to $20 billion in national currencies were exchanged daily. By the early part of the 21st century more than $1.5 trillion worth of yen, euros, dollars, and other currencies were traded daily to support the expanded levels of trade and investment. Large volumes of currency trades were also made as investors speculated on whether the value of particular currencies might go up or down.
Globalization raises other questions that will be central to the 21st century. What is the proper role for the IMF, WTO, and UN, and how should they be governed? What is the best way to finance development? How much autonomy should countries have when the economic, political, and environmental decisions they make can have global repercussions? To what extent should global institutions be able to constrain what countries can and cannot do in an increasingly globalized world? What is the right way to balance social and cultural values with the need for economic efficiency? As the 21st century progresses, more and more decisions regarding these and other issues will need to be debated.
Burtless, Gary T., and others, eds. Globaphobia: Confronting Fears About Open Trade. Brookings Institution, 1998. Arguments in favor of free trade, taking on those who oppose globalization.
Dicken, Peter. Global Shift: Reshaping the Global Economic Map in the 21st Century. 4th ed. Guilford Press, 2003. Textbook introduction to the economic, political, and technological changes behind globalization.
Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism. Simon & Schuster, 1997, 1998. Presents the negative aspects of free trade and globalization.
Kuttner, Robert. Everything for Sale: The Virtues and Limits of Markets. Knopf, 1997. Reprint, University of Chicago Press, 1999. Argues against completely free markets and in favor of some government intervention.
Longworth, Richard C. Global Squeeze: The Coming Crisis for First-World Nations. McGraw Hill, 1998. Explains how global markets work and what effects they have on economies and societies.
Tabb, William K. Unequal Partners: A Primer on Globalization. New Press, 2002. The effects of globalization on political, social, and ethical issues.
Yergin, Daniel, and Stanislaw, Joseph. The Commanding Heights: The Battle Between Government and the Marketplace that Is Remaking the Modern World. Rev. ed. Simon & Schuster, 2002. A lively description of government-dominated economies after World War II.
Tabb, William K., B.A., Ph.D. Professor of Economics, Queens College, City University of New York. Author of Unequal Partners: A Primer on Globalization (2002) ; Economic Governance in the Age of Globalization (2004) ; and Reconstructing Political Economy: The Great Divide in Economic Thought (1999).
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