Globalization
Learning Outcomes
- Define globalization and describe its manifestation in modern society
- Discuss the pros and cons of globalization
What Is Globalization?
Globalization refers to the process of integrating governments, cultures, and financial markets through international trade into a single world market. You’ve already learned about globalization as it applies to culture and technology, as well as stratification and inequality. In this context, you’ll examine its application as it connects to a global economy.
Often the process of globalization begins with a single motive, such as market expansion (on the part of a corporation) or increased access to healthcare (on the part of a nonprofit organization). But usually there is a snowball effect, and globalization becomes a mixed bag of economic, philanthropic, entrepreneurial, and cultural efforts. Sometimes the efforts have obvious benefits, even for those who worry about cultural colonialism, such as campaigns to bring clean-water technology to rural areas that do not have access to safe drinking water.
Other globalization efforts, however, are more complex. Let us look, for example, at the North American Free Trade Agreement (NAFTA). The agreement is among the countries of North America, including Canada, the United States, and Mexico and allows much freer trade opportunities without the kind of tariffs (taxes) and import laws that restrict international trade. Often, trade opportunities are misrepresented by politicians and economists, who may offer them up as a panacea for economic woes. For example, trade can lead to both increases and decreases in job opportunities. This is because while more lax export laws mean there is the potential for job growth in the United States, more imports can mean the exact opposite. As the United States imports more goods from outside the country, jobs here typically decrease, as more and more products are made overseas.
Many prominent economists believed that when NAFTA was created in 1994 it would lead to major gains in jobs. But by 2010, the evidence showed an opposite impact, including 682,900 U.S. jobs lost across all states (Parks 2011). While NAFTA did increase the flow of goods and capital across the northern and southern U.S. borders, it also increased unemployment in Mexico, which spurred greater amounts of illegal immigration motivated by a search for work. Most economic analyses indicate that NAFTA has been beneficial to the North American economies and the average citizen, but harmed a small minority of workers in industries with the greatest exposure to trade competition. Economists hold that withdrawing from NAFTA or renegotiating NAFTA in a way that reestablishes trade barriers will adversely affect the U.S. economy and cost jobs. However, Mexico would be much more severely affected by job loss and reduction of economic growth in both the short term and long term. This remains a controversial topic, especially since the election