Globalization-Why All the Fuss?

▪ 2001

      In 2000 the media were full of references to globalization of the economy, communications—even politics and military affairs. Large crowds turned out to protest meetings such as that of the World Trade Organization (WTO) in Seattle, Wash., in 1999 or called attention to International Monetary Fund (IMF) policies in granting loans to struggling economies. What were these protests all about?

      Globalization is a phenomenon involving the integration of economies, cultures, governmental policies, and political movements around the world. Internationalization is nothing new. Many of the large empires and religious movements represented forms of globalization. Trade and investment between countries have promoted interdependence of the world's economies for centuries. What is now called globalization, however, represents an exponential acceleration of the integration process. As early as 1962 the Canadian visionary Marshall McLuhan wrote that the electronic age was turning all humanity into a “global tribe,” and the term global village is attributed to him.

      Nowadays, the larger corporations organize production on a worldwide scale. Each step in the value-added chain, from research and development to processing of raw materials, production of parts, assembly of components, and marketing of the final product, is carried out in the most advantageous geographic location, regardless of where corporate headquarters are located or where the final good is sold. The globalization of markets means increasingly that similar goods are sold around the world for similar prices. The highly integrated financial and commodity markets see price movements in one part of the world instantaneously reflected in other major markets.

      The BBC, CNN, MTV, and the Internet have accelerated the integration of global culture. Teenagers around the world watch the same videos, listen to the same music, and wear the same clothes. At the same time, television audiences in virtually all countries watch the same major events, listen to the same financial forecasts, and see the same three-minute glimpses of ecological disasters.

      As globalization proceeds, the economic welfare of individuals is increasingly impacted by global market forces beyond the control of nation states and international institutions outside the domestic political process. Institutions such as the WTO and the IMF have become the target of criticism and protests from all sides. Some believe that too many economic decisions have been delegated to these institutions; others believe they should be given greater responsibility for solving the world's social and environmental problems. Some complain that they are secretive and unresponsive to civil society, while others worry about the loss of national sovereignty when citizen groups influence decision making in these institutions directly rather than indirectly through national governments.

      Clearly, the reality of globalization has outstripped the ability of the world population to understand its implications and the ability of governments to cope with its consequences. At the same time, the ceding of economic power to global actors and international institutions has outstripped the development of appropriate global political structures. As a result, probably many more years of public confusion and unfocused protests can be expected as the stable new global world order takes shape.

Geza Feketekuty

* * *