Globalization: Different Views

Early Definitions

Globalization is not a new phenomenon, oddly enough, despite the current debates raging about its impacts and issues. We often associate technology like the Internet with globalization, but the story begins long before that. The oldest form of the phenomenon is the spread of culture and ideas. 

Trade and barter began with the need to exchange goods millenia ago, and ideas and information often came along with the transaction. Let’s take a look at one fictitious transaction to see this exchange in action. Country A sets out to explore a new land. Its pioneers establish a settlement after crossing part of the world, where they find local populations. The people of Country A have a hard time adapting to the terrain of Country B, and the locals assist them by providing them with tips and their knowledge of the land. Country A then provides them with some of their technology in return.

While this involved no Internet or technology beyond a blanket or gun, it is a very simple example of globalization. In fact, we now celebrate this simple exchange in the United States as Thanksgiving. (More specifically, Thanksgiving commemorates the celebration dinner after the exchange, but you get the idea.) Were there impacts of this exchange? Yes! The population of Country A (which we now know are the Pilgrim settlers from England) survived Country B, and more of them began to arrive. The settlers exposed the Native Americans to diseases that were not previously seen in their area, which impacted their population. History has told the story of many more impacts from this exchange, both good and bad. However, interactions like this took place all over the world over millennia before the Internet was even created. This is the oldest form of globalization. 

Then Why Do Some Economists Place Globalization After the Industrial Revolution? 

If you have taken an introductory economics class, you may have been introduced to the progression of U.S. economics. Occasionally, globalization is listed as an event in the succession of movements from feudalism to modern times. However, that event is often placed after the Industrial Revolution and capitalism—during modern times. While this placement is most likely due to the notion that globalization is the force that’s having the greatest impact on modern world economics, it has the drawback of giving the impression that globalization didn’t exist before the Industrial Revolution. In fact, this impression may be both right and wrong.

Globalization has existed for millennia in the form of simple cultural and ideas exchanges, but with the advent of new technology, a new wave of globalization has emerged that is redefining economies. The Cold War, as war often does, brought us many new technologies, the least of which was the idea of the Internet. Designed as a way to keep military officials in quick contact during the Cold War, the Internet has evolved to what we know it as today. This simple mechanism that allows the easy transmission of information, communication, and ideas has taken that transaction of centuries ago between the Native Americans and the Pilgrims and has multiplied it. Within seconds, you can now talk to someone in a foreign country—something  that used to take months. Ideas can be transmitted instantly through videos of speeches or even 140 characters that can quickly reach millions.

This seems like we are still talking about globalization as a spread of ideas and culture, so how exactly has the definition changed from its origins to this new wave? In our current era, globalization is no longer just an idea that can quickly be spread—it also spreads the workforce. A person sitting on their couch in Iowa can purchase something from a supplier in Taiwan as simply as a few clicks of the mouse. This evolution of the quick ease of international business and purchasing has expanded our ideas. A tech support call can now be answered by someone countries away, and a doctor in a foreign country can read an X-ray in the middle of the night for a hospital that can’t afford third-shift labor rates in its own country. 

Is the World Flat? 

The evolution and spread of globalization has led some to claim the world is “flat.” This doesn’t refer to the unfortunate increase of people in the United States who do once again believe the world is physically flat. Instead it means, as author Thomas Friedman argues, that globalization is leading to an evening of the playing field—or flattening—with regards to transferable comparative advantage between parts of the world. To a certain extent, Friedman also implies the economic idea of the law of one price: the idea that factor prices will level as out as countries trade and living standards rise. Friedman is not the only theorist with this idea, but he is a major author in the realm.

If you’re interested in learning more, you can find YouTube videos of Friedman speaking on the subject. Video 1.# is one such example.

Many theorists oppose this view of a flat world, a perspective you’ll explore further in the exploration activity this week. The world has been seeing pushback against the idea of globalization in many forms, from the Brexit vote to presidential elections in multiple countries (including the United States) voting in leaders with nationalist platforms. Modern theorists have called this trend anti-globalization.