Effects of globalization

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Contents

Introduction

1. The concept and essence of globalization

1.1 What is globalization

1.2 History of globalization

1.3 Different types of globalization

2. Effects of globalization

Conclusion

Bibliography

Endnotes

Introduction

Today it is really difficult to find a more fashionable and a discussion topic as globalization. Dozens of conferences and symposia, hundreds of books and thousands of articles are devoted to it. It is discussed and debated by scientists, politicians, businessmen, religious figures, artists, and journalists.

Speaking about the basics of this phenomenon, it may be noted that some of the features of contemporary globalization, have been examined for a long time. The roots of the process had come from time when the establishment of colonial empires laid the first foundations of international economic relations in this millennium. However, the modern international economic relations that underlie globalization are fundamentally different from those that have been formed since the beginning of the Age of Discovery and the establishment of colonial empires.

During the colonial era were built mainly relations between the metropolis and its colonies, presenting the actual exchange of finished goods and products made in the metropolis, on the raw materials and other colonial products. Foundations of modern systems are based primarily on the commodity and economic relations between the developed countries, in fact, between metropolises. These relationships are the exchange of highly complex end products and advanced technologies. This is caused by historically different sectoral specialization of some developed countries and regions. For example, the U.S. presents the interest in Japanese electronic products industry, and for Japan - power equipment, manufactured in the USA. In fact, these chains are much more extensive and complex. The current economic relations between the developed countries can be described as inter-industry. It also saved the relationship that existed between the metropolis and the colonies, which are intra.

For example, the developed countries are using the former colonies as a source of raw materials and labor, often "taking out" there the high-tech manufacturing. Another important feature of the process of globalization, internationalization is not only barter as production processes. It should be said about this generation in recent years, as transnational corporations (TNC). The current international trade largely implements the processes of cooperation and exchange of goods taking place within the same TNC, for example, between the branches or subsidiaries located in different parts of the world, or with other multinationals. globalization political technical

Now it should be said about another important feature of globalization of the world economy - the rapid development of financial markets in the last years of the twentieth century. The new role of the financial markets (currency, stock, credit) in recent years has dramatically changed the «architecture» of the world economy. A few decades ago, the main purpose of financial markets has been the operation of the real economy. In recent years, the global financial market began to show self-sufficiency. As a result, today we see the growth of this market at times, which was the result of a wide range of speculation caused by the liberalization of economic relations. The process of getting money out of the money has never been easier, thanks to the elimination of it, in fact, of the production of any goods or services. Production was replaced by speculation into various derivative financial instruments such as futures and options, as well as speculation on the margin rates of world currencies.

Enormous scale and pace of the international financial market can really make a serious threat to the economy. Huge masses move freely in the world of speculative capital can, on the one hand, easily animate, on the other hand, bring down the financial system almost every state. Recent history knows some examples of that. Such as collapse of the national currency of the UK, caused by speculative operations funds of George Sores, and the last Asian crisis, which "demonstrated this new situation: 1) vastly increased role of financial markets, and 2) an advanced globalization of markets ...". Today, of all transactions on the foreign exchange markets only 10% serve foreign trade.

Today we can say with confidence that in the late XX century, globalization has become the most important trend in the development of the world economy, the same role is waiting for it in XXI century. It should be noted that the role of globalization in human life is not limited only by changes in the structure of the economy - its manifestations we experience by ourselves in the social and cultural sphere.

Historians and politicians will debate very long time about the rich heritage of the past century, but its ideological and political results are unlikely to be revised in the near future. Briefly, they are: human rights have fundamental meaning, democracy is stronger than tyranny, market is more effective than command economy, openness is better than isolation. This system of values ??and attitudes, the founder and an active promoter of which historically performed the West, got the widespread acceptance in the modern world.

Convergence of views and approaches characteristic of modern humanity, somehow manifested in public practice. After the collapse of the "socialist" market economy, political democracy, ideological pluralism, open society have become generally valid guidelines in moving forward. For the first time in the history of the absolute majority of people living on Earth gradually develop a common understanding of the basic principles of living arrangement. It is the ideological foundation of globalization.

A hundred or two hundred years ago, the end of the century was marked by new scientific and technological revolution. Intelligence, knowledge, technology are becoming the most important economic assets. In advanced countries, that are included in the Organization for Economic Cooperation and Development, more than half of the gross domestic product is created in the intellectually capacious production. The Information Revolution (IR), based on a combination of computer telecommunications networks, radically transforms the human being. It compresses time and space, opens borders, allows the contacts anywhere in the world. It transforms individuals into citizens of the world.

In the new social space the time speeds up the run. Things on which were spent months and year now can be made by a matter of days. The process of social interaction is enhanced, acquires an unprecedented momentum. Public space is being compressed and mixed, becoming more homogeneous.

Without going to extremes and exaggeration, we can say that if the information revolution is not a victory of reason over time and space, so, such a significant weakening of this real constraining human activity, most of things that seemed unthinkable becomes possible. The new forms of communication, new forms of cooperation, and new creative possibilities of human globalization find its economic base.

Is it good or bad? People's opinions are divided. There appeared two «camps»: people who are for the globalization and who are for anti-globalize. On the one hand, globalization unifies world, blurs the boundaries between civilizations, makes all people go one way, and therefore eliminates the reasons for discord and war. Actually, if the values ??are the same - for what they will kill each other? Globalization is an inevitable evolutionary process that promotes the survival of human communities, rather than individual crops. On the other hand, globalization unifies world, blurs the boundaries between civilizations, and makes all go one way, practice the same values. And if the values are wrong? Then the global world without pluralism, simply collapse into tartar. Necessary for the survival of diversity is repugnant to the spirit of globalization.

Thus, the aim of my course work is to understand and analyze even the globalization is a necessary process for the world or it will just destroy it forever.

1. The concept and essence of globalization

1.1 What is globalization?

There are so many different points of view concerning the answer of this question and it is really difficult to find the general definition of globalization. However, I have found a very interesting and useful work of Dr. Nayef R.F. Al-Rodhan where was written and described his researches concerning the definition of globalization.

Globalization is not a single concept that can be defined and encompassed within a set time frame, nor is it a process that can be defined clearly with a beginning and an end. Furthermore, it cannot be expounded upon with certainty and be applicable to all people and in all situations. Globalization involves economic integration; the transfer of policies across borders; the transmission of knowledge; cultural stability; the reproduction, relations, and discourses of power; it is a global process, a concept, a revolution, and “an establishment of the global market free from sociopolitical control.” Globalization encompasses all of these things. It is a concept that has been defined variously over the years, with some connotations referring to progress, development and stability, integration and cooperation, and others referring to regression, colonialism, and destabilization. Despite these challenges, this term brings with it a multitude of hidden agendas. An individual's political ideology, geographic location, social status, cultural background, and ethnic and religious affiliation provide the background that determines how globalization is interpreted. In 1995, Martin Khor, President of the Third World Network in Malaysia, referred to globalization as colonization. Concurrently, Swedish journalist Thomas Larsson, in his book The Race to the Top: The Real Story of Globalization (2001), stated that globalization: “is the process of world shrinkage, of distances getting shorter, things moving closer. It pertains to the increasing ease with which somebody on one side of the world can interact, to mutual benefit, with somebody on the other side of the world.” These two different interpretations reflect different perspectives rooted in different world positions.

By its nature, globalization spans a multitude of disciplines, communities, and cultures. This, of course, allows for a variety of viewpoints, be they economic, social, or political. The definitions presented here reflect some of those viewpoints. It is also vital that these definitions be presented against the reality of the global situation, as Vidya S. A. Kumar rightly points out in his article “A Critical Methodology of Globalization: Politics of the 21^st Century?”. It is, however, beyond the scope of this paper to assess the extent to which each of the statements captures reality. Rather, we look at issues surrounding the difficulties of defining globalization and discuss the benefits of doing so within the larger debate.

The impact of globalization is vast, as the definitions that we present here indicate. One question remains regarding the potential difficulty of trying to define this concept, as well as the limitations involved in trying to do so: does this hinder discussions about globalization? Does the fact that globalization requires constant defining inhibit or undermine true academic debate about the geopolitical implications of this process before that debate even begins?

This paper does not propose a definition that will be useful and acceptable to everyone. Nor does it try to justify why one definition might be better than another. Rather, we suggest reviewing the definitions that are available in an attempt to truly understand this concept, and we also propose a definition that we think might be broad enough to address most aspects of the process.

Methodology

This study provides a thorough overview of existing definitions of globalization, which we were able to use to develop our own definition. In reviewing current definitions, it is at once apparent that some are rather narrow and exclusive, while others are broad and inclusive. Each approach has its strengths and weaknesses: more-general definitions tend to be all-encompassing but more abstract, while more-specific definitions are better justified but narrower in scope. For example, Kenichi Ohmae stated in 1992 that “globalization means the onset of the borderless world.”

This definition does not have positive or negative connotations but is vague and inclusive. This definition could be used as a basis for a working paper on a number of subjects, including technology, trade agreements, and just about any other issue that deals with overcoming traditional boundaries. This definition is a bit too vague, however, for discussions on the detailed implications of globalization. Alternatively, a detailed definition would be suited to this type of discussion. Robert Cox provides a good example of this approach: “the characteristics of the globalization trend include the internationalizing of production, the new international division of labor, new migratory movements from South to North, the new competitive environment that accelerates these processes, and the internationalizing of the state… making states into agencies of the globalizing world.” This definition is more detailed and contributes more to the discussion. Despite this benefit, this can also be limiting, as it may only be applicable to those that agree with this definition. As mentioned earlier, this can also stall the debate about the implications of this type of globalization because a discussion about negative and positive connotations could lend itself to a paper and subsequent discussion all on its own without delving into deeper ramifications.

So how should one go about defining globalization? Some academics have determined that it is a useless task. Kumar argues that “the debate about what to do about globalization is still very much a debate about what globalization is.” His article focuses on the debate regarding the definition of such a term and what relation this has to reality. This means that he also needs to be cautious in claiming that some definitions come closer to reality than others, which is not what we intend to do in this article. We have compiled a comprehensive list of definitions of globalization in order to provide a survey of what some academics, theorists, sociologists, politicians, and leaders claim globalization actually is.

Results

The results of our overview appear in a table later in this paper. We gathered definitions from both academic and resource guides in an attempt to look for patterns and similarities. In general, we found agreement with George Ritzer, who, in his article “The Globalization of Nothing,” wrote: “attitudes toward globalization depend, among other things, on whether one gains or loses from it.”

In reviewing all of these definitions, it is clear that the literature does not come any closer to an understanding of what globalization actually is. Due to the complexity of the concept, research projects, articles, and discussions usually remain focused on a single aspect of globalization in order to be able to provide some concrete solutions and recommendations. It is understandable that a definition developed for a particular paper, if one is developed at all, would focus on the aspect in question in order to provide a benchmark for the remainder of the paper. No matter what definition you adhere to, globalization is complex and multifaceted. Therefore, any definition that comes close to reflecting the reality of globalization must also be complex and multifaceted. Many of the definitions presented here are useful in a number of cases and disciplines, but others remain focused on one point or another, which limits their scope (which is the purpose of their usage). However, most scholars realize the significance a definition can have. Like the concept of globalization itself, the definitions presented here are broad and may be perceived in a variety of ways. They appear in chronological order.

In our opinion, and based on our knowledge of globalization as it is understood today, we propose the following definition:

“Globalization is a process that encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities.”

In the development of our own definition of globalization, it was vital to utilize a broad perspective in order for it to be brief yet as comprehensive as possible. Globalization is not an endpoint to be discussed and then forgotten. Rather, it is a process, a current that has been impacting communities, cultures, and economies for hundreds of years. It is a result of the transnational and transcultural integrations that have occurred globally throughout human history. It encompasses the causes, the course, and the consequences of these integrations. This intermingling has transpired through activities that are both human and non-human in nature. Human activities encompass the linguistic, cultural, economic, and political aspects of human life (along with many others) that are a part of the human and social sphere. It is also important to include non-human activities, which incorporate, but are not limited to, the spread of bacteria and non-human diseases such as bird flu, as well as natural disasters such as tornadoes, tsunamis, earthquakes, and hurricanes. As all of these issues impact human and global security, it is our opinion that a truly comprehensive definition must address them. In addition, it is important to recognize that globalization is not a force that needs to be stopped; rather, it is a process that influences each of us in a number of ways, both to our benefit and also to our detriment. When embraced in the context of our definition, globalization can be understood in a way that allows for a greater appreciation of, and, consequently, movement towards furthering, individual, as well as global, security and stability.

Discussion

This overview of current definitions of globalization can arguably leave one feeling more confused in the discourse than before. The abundance of definitions is clearly an indication of the varying opinions that have developed regarding this concept since it first appeared in Webster's dictionary in 1961. The past decades have allowed for the creativity of humankind to develop the definitions that appear in this paper. However, abundance does not necessarily indicate that with each new definition there has been marked improvement. Since the debate over globalization stems largely from the act of defining the concept, it is important to see the progression of where the definitions have come from and how different connotations have emerged. This overview illustrates that many of the definitions refer to questions of economics: of the 114 definitions presented here, 67 of them make some reference to the economic dimension either through market expansion or the selling of goods and services. Many of these definitions do, however, include other dimensions: quite often they involve political and social aspects as well. However, this does indicate that notions of globalization, at least in our representation, tend to lean toward the economic roots of the concept.

Similarly, the definitions tend to be multifaceted and complex. They are rarely confined to one or two lines; rather, an elaborate definition is more often the norm in addressing this issue. This is illustrative of the complex nature of globalization: in attempting to determine how the impact of globalization is most felt, whether politically, economically, or socially, one frequently finds oneself debating aspects that are also multidimensional. This appears to be universal, as a majority of our authors have written definitions that are lengthy. Therefore, it is safe to assume that the majority of definitions will encompass such aspects.

So what conclusions might we draw from this overview? To what extent have the definitions helped us understand more fully the concept of globalization? Why should one engage in such a study? Globalization is evolutionary; it is a fluid process that is constantly changing with the development of human society. This becomes more evident when assessing the various attempts at defining this idea. This paper argues that the perspective of the person who defines globalization shapes any definition thereof. One could reflect on the impact of globalization for days without having a clear understanding of what in reality the term means. By analyzing what has been offered in attempts to express the meaning of such a complex idea, it forces the issue to be simplified in one or two sentences. In this task, the core of the discourse must be determined by the author. The definition is a clear indication of what the author's perspective is on where globalization has come from and, more importantly, what it will mean in geopolitical terms in the future. By only having an abstract concept and nothing concrete, there is no reference point.

Does this mean, then, that in order to have a worthwhile debate on globalization, a definition must be agreed upon at the outset? In a way, this is the case. If nothing else, this overview of definitions has made it clear that globalization is many things to many different people. As Arjun Appadurai noted in 1996, “globalization is a `world of things' that have `different speeds, axes, points of origin and termination, and varied relationships to institutional structures in different regions, nations, or societies.'” This captures the complexity of globalization without actually defining it. It implies that further elaboration would not be particularly useful. The future of globalization is one that no academic would venture to try to predict. The fluidity of this concept makes concrete recommendations for a definition difficult. By looking at the ways in which the definition has changed over the past 45 years, one can ascertain that the future will not give way to a simpler or a more refined means of arriving at a clearer conceptualization of the process. There are definitions presented in our table that are timeless, and there are those that indicate that globalization is a trend. Anthony McGrew's elaboration of this concept illustrates this point: “globalization [is] a process which generates flows and connections, not simply across nation-states and national territorial boundaries, but between global regions, continents and civilizations. This invites a definition of globalization as: `an historical process which engenders a significant shift in the spatial reach of networks and systems of social relations to transcontinental or interregional patterns of human organization, activity and the exercise of power.'”

The challenge of defining globalization is not going to disappear or lose importance anytime in the near future. By exploring the various explanations and thoughts behind the idea that has come to be called globalization, we are able to see how the concept has been identified over the course of the approximately thirty years represented in Table 1. It allows for a balanced view of globalization in a way that can allow for a better understanding of where the term is rooted and where it might be headed in future research and policy work. As globalization exists at different times and means different things to different facets of society and the international system, it can never fully be defined to the satisfaction of all who are impacted by its implications. Despite this difficulty, the definitions do permit a comprehensive understanding of globalization that is extensive enough to allow us to see what lies at the core of the thoughts of those thinking about the concept in modern discourse.

Conclusion

The remaining questions center around the value that defining this concept adds to the globalization debate. It could be argued that the discussion that stems from the definition issue is in fact a vital part of the discourse itself. Sociologist Cesare Poppi contributes a thought in this regard: “The literature stemming from the debate on globalization has grown in the last decade beyond any individual's capability of extracting a workable definition of the concept. In a sense, the meaning of the concept is self-evident, in another, it is vague and obscure as its reaches are wide and constantly shifting. Perhaps, more than any other concept, globalization is the debate about it.”

The debate surrounding globalization is a large part of its lifeblood. Without it, there would be no need for a paper of this nature, nor would there be the resources to pull together so many definitions. Poppi is correct: globalization is the debate, and the debate is globalization. Without one, the other is inconceivable. The matter of defining globalization can be deemed useless because of its shifting nature, its ambiguity, its influence from the perspective from which one views it. But the attempt, even if it feels like an everlasting and futile task, does contribute to the debate and does stimulate discussion about globalization. Searching for a definition thus does help renew focus on the policy challenges and responses needed, which in turn sheds further light on the globalization process and its many-sided impact on stability. Being unable to come up with a Webster's-dictionary-style definition is part of what makes it an interesting point of departure for further discussion and study.

From my point of view the most common definition of globalization is that globalization can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, socio-cultural and political forces. It's a movement of people, goods, capital and ideas due to increased economic integration. Globalization is a controversial issue mainly because different groups interpret it in different ways.

1.2 History of globalization

The historical origins of globalization are the subject of on-going debate. Though some scholars situate the origins of globalization in the modern era, others regard it as a phenomenon with a long history.

Perhaps the most extreme proponent of a deep historical origin for globalization was Andre Gunder Frank, an economist associated with dependency theory. Frank argued that a form of globalization has been in existence since the rise of trade links between Sumer and the Indus Valley Civilization in the third millennium B.C. Critics of this idea point out that it rests upon an overly-broad definition of globalization.

Others have perceived an early form of globalization in the trade links between the Roman Empire, the Parthian empire, and the Han Dynasty. The increasing articulation of commercial links between these powers inspired the development of the Silk Road, which started in western China, reached the boundaries of the Parthian empire, and continued onwards towards Rome.

The Islamic Golden Age was also an important early stage of globalization, when Muslim traders and explorers established a sustained economy across the Old World resulting in a globalization of crops, trade, knowledge and technology. Globally significant crops such as sugar and cotton became widely cultivated across the Muslim world in this period, while the necessity of learning Arabic and completing the Hajj created a cosmopolitan culture.

The advent of the Mongol Empire, though destabilizing to the commercial centers of the Middle East and China, greatly facilitated travel along the Silk Road. This permitted travelers and missionaries such as Marco Polo to journey successfully (and profitably) from one end of Eurasia to the other. The so-called Pax Mongolica of the twelfth century had several other notable globalizing effects. It witnessed the creation of the first international postal service, as well as the rapid transmission of epidemic diseases such as bubonic plague across the newly-unified regions of Central Asia. These pre-modern phases of global or hemispheric exchange are sometimes known as archaic globalization.

Up to the time of the voyages of discovery, however, even the largest systems of international exchange were limited to the Old World. The sixteenth century represented a qualitative change in the patterns of globalization because it was the first period in which the New World began to engage in substantial cultural, material and biologic exchange with Africa and Eurasia. This phase is sometimes known as proto-globalization. It was characterized by the rise of maritime European empires, particularly the Portuguese Empire, the Spanish Empire, and later the British Empire and Dutch Empire. It can be said to have begun shortly before the turn of the 16th century, when the two Kingdoms of the Iberian Peninsula - the Kingdom of Portugal and the Kingdom of Castile, began to send exploratory voyages to the Americas and around the Horn of Africa. These new sea routes permitted sustained contact and trade between all of the world's inhabited regions for the first time.

Global integration continued through the expansion of European trade in the 16th and 17th centuries, when the Portuguese and Spanish Empires colonized the Americas, followed eventually by France and England. Globalization has had a tremendous impact on cultures, particularly indigenous cultures, around the world. In the 15th century, Portugal's Company of Guinea was one of the first chartered commercial companies established by Europeans in other continent during the Age of Discovery, whose task was to deal with the spices and to fix the prices of the goods.

In the 17th century, globalization became a business phenomenon when the British East India Company (founded in 1600), which is often described as the first multinational corporation, was established, as well as the Dutch East India Company (founded in 1602) and the Portuguese East India Company (founded in 1628). Because of the large investment and financing needs and the high risks involved with international trade, the British East India Company became the first company in the world to share risk and enable joint ownership of companies through the issuance of shares of stock: an important driver for globalization.

The 19th century witnessed the advent of globalization in something approaching its modern form. Industrialization permitted the cheap production of household items using economies of scale, while rapid population growth created sustained demand for commodities and manufactures. Globalization in this period was decisively shaped by nineteenth-century imperialism. After the Opium Wars and the completion of the British conquest of India, the vast populations of these regions became ready consumers of European exports. Meanwhile, the conquest of new parts of the globe, notably sub-Saharan Africa, by the European powers yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies, and the United States.

It was in this period that areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. The first phase of "modern globalization" began to break down at the beginning of the 20th century with the First World War, according to John Maynard Keynes, “The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914.”

The novelist VM Yeates criticized the financial forces of globalization as a factor in creating World War I.

The final death knell for this phase of globalization came during the gold standard crisis and Great Depression in the late 1920s and early 1930s.

Globalization in the middle decades of the twentieth century was largely driven by the global expansion of multinational corporations based in the United States and the worldwide export of American culture through the new media of film, television and recorded music.

In late 2000s, much of the industrialized world entered into a deep recession. Some analysts say the world is going through a period of deglobalization after years of increasing economic integration. Up to 45% of global wealth had been destroyed by the global financial crisis in little less than a year and a half.

1.3 Different types of globalization

Globalization is a massive topic which is studied at length and as a result any answer here is going to be just the tip f the iceberg. There are many different types of globalization, the three main subtypes are: Economical, Cultural/Social and Political.

Economic globalization is the increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology, and capital. Whereas globalization is centered around the rapid development of science and technology and increasing cross-border division of labor, economic globalization is propelled by the rapid growing significance of information in all types of productive activities and marketization, and the advance of science and technologies. Depending on the paradigm, economic globalization can be viewed as either a positive or a negative phenomenon.

Economic globalization comprises the globalization of production, markets, competition, technology, and corporations and industries. While economic globalization has been occurring for the last several hundred years (since the emergence of trans-national trade), it has begun to occur at an increased rate over the last 20-30 years under the framework of General Agreement on Tariffs and Trade and World Trade Organization which made countries to gradually cut down trade barriers and open up their current accounts and capital accounts. This recent boom has been largely accounted by developed economies integrating with less developed economies, by means of foreign direct investment, the reduction of trade barriers, and in many cases cross border immigration.

It can be argued that economic globalization may or may not be an irreversible trend. There are several significant effects of economic globalization. There is statistical evidence for positive financial effects as well as proposals that there is a power imbalance between developing and developed countries in the global economy. Furthermore, economic globalization has an impact on world cultures.

2. Effects of globalization

Positive effects

There are at least three positive financial effects of economic globalization. "Per capita GDP growth in the post-1980 globalizers accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s--18 out of the 24 globalizers experienced increases in growth, many of them quite substantial."

Despite many analysts' concerns about the inequality gap between developed and developing nations, there is no evidence to suggest that inequality increases as international trade increases. Rather, growth benefits of economic globalization are widely shared. While several globalizers have seen an increase in inequality, most notably China, this increase in inequality is a result of domestic liberalization, restrictions on internal migration, and agricultural policies, rather than a result of international trade.

Economic globalization also has helped to decrease poverty around the world. Poverty has been reduced as evidenced by a 5.4 percent annual growth in income for the poorest fifth of the population of Malaysia. Even in China, where inequality continues to be a problem, the poorest fifth of the population saw a 3.8 percent annual growth in income. In several countries, those living below the dollar-per-day poverty threshold declined. In China, the rate declined from 20 to 15 percent and in Bangladesh the rate dropped from 43 to 36 percent.

The final positive effect to be mentioned is the narrowing gap between the rich and the poor. Evidence suggests that the growth of globalizers, in relation to rich countries, suggests that globalizers are narrowing the per capita income gap between the rich and the globalizing nations. China, India, and Bangladesh, who were among the poorest countries in the world twenty years ago, have greatly influenced the narrowing of worldwide inequality due to their economic expansion.

Negative effects and solutions

The Economic Commission for Latin America and the Caribbean (ECLAC) has proposed an agenda to support conditions for developing countries to improve their standing in the global economy. Economists have theories on how to combat the disadvantages faced by developing countries. However, the advantaged countries continue to control the economic agenda. In order to rectify the social injustice dilemma, international economic institutions (such as the World Bank and the International Monetary Fund) must give voice to developing countries. A solution is to issue global rules that protect developing countries. It is still difficult for leaders of developing nations to influence these global rules.

In his article, Gao Shangquan elaborates this point saying that economic globalization has in fact expanded rather than reduced the gap between the North and South. He is referring to some UN report in 1999, in order to show that the number of developing countries that have benefited from economic globalization is smaller than 20, that the average trade deficit of developing countries in 1990's increased by 3% as compared with that in 1970s, and that over 80% of the capital is flowing among US, Western European and East Asian countries.

The influx of international corporations not only brings positive advantages regarding global financial transactions. Some may emphasize that the multinational corporations may raise education levels as well as the financial health in developing countries, but that only applies to the long term effects of economic globalization. In the short term, poor countries will become poorer and unemployment rates may soar. Automation in the manufacturing and agricultural sectors always follows the appearance of multinational corporations. This lessens the need for unskilled and uneducated workers thus raising unemployment levels. Also, in the developing countries where this phenomenon occurs, infrastructure to reeducate these unskilled workers are not properly established which means a redirection of the government's focus from social services to education.

In order to create better economic relations globally, international lending agencies must work with developing countries to change how and where credit is concentrated as well as work towards accelerating financial development in developing countries. There is a need for social respect for all persons worldwide. The Economic Commission of Latin America and the Caribbean suggests that in order to ensure such social respect, the United Nations should expand its agenda to work more rigorously with international lending agencies. Despite their title, international lending agencies tend to be nation-based. The ECLAC suggests that international lending agencies should expand to be more inclusive of all nations and they propose that there is a need for universal competitiveness. Key factors in achieving universal competition is the spread of knowledge at the State level through education, training and technological advancements. Economist, Jagdish Bhagwati, also suggests that programs to help developing countries adjust to the global economy would be beneficial for international economic relations.

Several movements, such as the fair trade movement and the anti-sweatshop movement, have worked towards promoting a more socially just global economy. The fair trade movement has played a significant role in alleviating exploitation due to economic globalization. For example, fair trade sales account for 1.6 billion US dollars each year. The fair trade movement works towards improving trade, development and production for disadvantages producers. Furthermore, the movement works to raise consumer awareness of exploitation of developing countries. Fair trade works under the motto of "trade, not aid", to improve the quality of life for farmers and merchants by participating in direct sales, providing better prices and supporting the community.

Effects on world cultures

Economic globalization may have various strong impacts on different world cultures. Populations may mimic the international flow of capital and labor markets in the form of immigration and the merger of cultures. Foreign resources and economic measures may impact different native cultures and may cause assimilation of a native people. Researchers are now studying the effects of economic globalization on the youth in various world populations such as Arab, South American, South East-Asian, Caribbean, and African populations. As these populations are exposed to the English language, computers, western music, and North American culture, changes are being noted in shrinking family size, immigration to larger cities, more casual dating practices, and gender roles are transformed.

Yu Xintian wrote in a cultural impact study that there were two contrary trends in culture due to economic globalization. Xintian argues that culture and industry not only flows from the west while affecting people, but he says there is also a cultural nationalization or an effect of localization that wishes to promote and protect individual cultures. He also points out that economic globalization began after WWII, whereas internationalization began over a century ago and is something completely different.

George Ritzer wrote about the McDonaldization of society and how fast food businesses spread throughout the United States and the rest of the world, forcing world populations to adopt fast food culture. In this book, Ritzer also writes about how other businesses have copied the McDonalds Corporation's business model for expansion and influence. In 2006, 233 of 280 or over 80% of the new McDonalds opened were overseas. In 2007, Japan had 2,828 McDonalds locations and serves as just one example of the globalized effect of international corporations. The Body Shop, a British ecologically conscious cosmetic company, represents the process of McDonaldization working in all directions.^[34] Various countries export their own versions of McDonaldization but have the same influences in standardizing world culture.