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Globalization (or globalisation) in its literal sense is a social change, an increased connectivity among societies and their elements due to transculturation; the explosive evolution of transport and communication technologies to facilitate international cultural and economic exchange. The term is applied in various social, cultural, commercial and economic contexts. "Globalization" can mean:- The formation of a global village - closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between " world citizens",
- Economic globalization - more freedom of trade and increasing relations among members of an industry in different parts of the world (globalization of an industry),
- The negative effects of for-profit multinational corporations - the use of substantial and sophisticated legal and financial means to circumvent the bounds of local laws and standards, in order to leverage the labor and services of unequally-developed regions against each other.
It shares a number of characteristics with internationalization and is used interchangeably, although some prefer to use globalization to emphasize the erosion of the nation state or national boundaries.
1 History of globalization
Since the word has both technical and political meanings, different groups will have differing histories of "globalization". In general use within the field of economics and political economy, is, however, a history of increasing trade between nations based on stable institutions that allow individuals and firms in different nations to exchange goods with minimal friction.
The term "liberalization" came to mean the combination of laissez faire economic theory with the removal of barriers to the movement of goods. This led to the increasing specialization of nations in exports, and the pressure to end protective tariffA tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty''. A revenue tariff is set with the intent of raising money for the government. A protective tariff usually applied to imported goods, is intended to artificiallys and other barriers to trade. The period of the gold standardThis article is on the monetary principle. For gold standard in diagnostic testing see gold standard (test The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. When several nations are on a fixed and liberalization of the 19th century is often called "The First Era of Globalization". Based on the Pax BritannicaPax Britannica (modeled after " Pax Romana") refers to a period of British imperialism after the Battle of Waterloo and the War of 1812, which led to a period of overseas British expansionism. During this period, the British Empire controlled most key nav and the exchange of goods in currencies pegged to specie, this era grew along with industrialization. The theoretical basis was Ricardo's work on Comparative advantageIn economics, the theory of comparative advantage explains why it can be beneficial for two countries to trade, even though one of them may be able to produce every kind of item more cheaply than the other. What matters is not the absolute cost of product and Say's Law of General equilibriumWalras' analysis. General equilibrium theory is a branch of theoretical microeconomics. It seeks to explain production, consumption and prices in a whole economy. This article considers neoclassical approaches to general equilibrium. Investigations into t. In essence, it was argued that nations would trade effectively, and that any temporary disruptions in supply or demand would correct themselves automatically. The institution of the gold standard came in steps in major industrialized nations between approximately 1850 and 1880, though exactly when various nations were truly on the gold standard is a matter of a great deal of contentious debate.
The "First Era of Globalization" is said to have broken down in stages beginning with the first World War, and then collapsing with the crisis of the gold standard in the late 1920's and early 1930's.
Globalization in the era since World War IIWorld War II was the most extensive and costly armed conflict in the history of the world, involving the great majority of the world's nations, being fought simultaneously in several major theatres, and costing tens of millions of lives. The war was fough has been driven by Trade Negotiation Rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on " free trade". The Uruguay round led to a treaty to create the World Trade Organization or WTO, to mediate trade disputes. Other bilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.
Proponents claim that this leads to lower prices, more employment and better allocation of resources. Sympathetic critics point out that the results of globalization have not been what was predicted when the attempt to increase free trade began, and that many institutions involved in the system of globalization have not taken the interests of poorer nations and labor into account. Unsympathetic critics link globalization with corporatization, and the increasing autonomy of corporate entities to force nation-states to bend political policy to the will of corporate entities. Many conferences between trade and finance ministers of the core globalizing nations have been met with large, and sometimes violent, protests from opponents of "corporate globalism".
