Most historians, economists, political scientists, and academics in general agree that the defining concept of the last 20 years has been globalization. What is globalization? That is hard to define in a quick way.  Is globalization good or bad?  That is a controversial question.  Some people contend that globalization is the best thing to happen to mankind, others will say it is the worst. If you give a person an example like the ability to buy oranges in December they will say “I love my oranges in December.” But if you give them the example of falling wages in the USA as American wages are driven down by competition from low wage countries around the world–they will say “that’s not fair!”  Good or bad, fair or not, globalization is not going anywhere. Indeed, for most of us it is so much a part of our lives, so much around us, that we don’t even fully notice it.  This lecture and the viewing from John Green will help you understand globalization.  Whether it is a positive or a negative in your life–that is a question you will need to answer.

Much of what you will hear from John Green and will read about when discussing globalization will deal with the globalization of business. This refers to businesses moving beyond domestic and national markets to other markets around the globe, allowing them to become interconnected with different markets. That is where my “oranges in December” example comes from. In order to get oranges in December we need to have access to countries growing them during our winter.  If you look at your t-shirt it was not made in America.  Some of the biggest employers in Lowndes County Mississippi are not American companies. Paccar makes engines just outside Columbus, MS and that is a Dutch company.

(The Paccar Plant near Columbus)

The focus on business globalization is reasonable.  We have shelves full of goods made in other countries. Headlines announce another American company moving its jobs to a foreign country.  But I like to start with another view of globalization.  A more personal one and one that may more clearly demonstrate how globalization can effect lives in a practical manner.

I like to travel. I love Edinburgh, Scotland. I spent five years living there while I finished my PhD at the University of Edinburgh. My wife and I made many friends there. I have taken five groups of MUW students to Edinburgh and have visited many times over the years.  What does this have to do with globalization?  Everything. I am writing this at 11 am in Mississippi. If I wanted to I could throw a few things in a bag and drive to Memphis by early afternoon. I would drive to Memphis in my Toyota (Japanese company) that was built in the USA.  I could purchase an airline ticket to Newark, NJ and from their take a short 6 hour flight to Edinburgh. I can buy all these tickets online in a matter of minutes, charge them to my credit card, and the ticket will be waiting for me at the airport. I will be in Edinburgh by tomorrow morning.

(Me on top of Braid Hill with Edinburgh in the background. I could be there tomorrow morning if I wanted.)

Landing in Scotland all I need is my American passport to get into the country. After picking up my bag I would jump on the tram which was largely constructed by the German firm Siemens and be wisked into the center of the city in about 15 minutes.  I would walk to an apartment I had arranged to rent on an international website like “Air BNB” or “Edinburgh Lets.”  By tomorrow evening I could be enjoying a glass of wine and great Italian food at one of my favorite restaurants-Bar Italia.  And, their rissoto is just about worth the trip. That for me is globalization. My inter-connectedness to the world and my ability to engage the world in a real, practical way that enhances my life and experiences.

If you take the economic, political, and lifestyle elements of globalization and put them all together you get a definition that is complex, but it works. Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

Globalization is not new, though. For thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914.

Map of the Silk Road–a older example of globalization.

But policy and technological developments of the past few decades have spurred increases in cross-border trade, investment, and migration so large that many observers believe the world has entered a new phase in its economic development. Since 1950, for example, the volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled, from $468 billion to $827 billion. International trade and investment has continued to grow in the 2000s. There have been some dips due to economic downturns but the overall trend is up–see chart below that shows trade volume and FDI (foreign direct investment).

Distinguishing this current wave of globalization from earlier ones, author Thomas Friedman has said that today globalization is “farther, faster, cheaper, and deeper.” I can order a item from a company in China and have it at my door in Mississippi in a matter of two days.  We enjoy cheaper goods because they are made in countries with lower wages. However, many industries in America have disappeared. The clothing industry in America used to be huge. Now it is gone. We get news from the otherside of the world as it happens without having to wait for it to be reported and printed in a newspaper. I can Skype with my friends in Scotland instantly.  I can send an e-mail to a bank in London and they get it in seconds.

This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems. These systems are the opposite of a central planned economy (see lecture on fall of communism.) Free market economies try to reduce government involvement with the economy.  Rather the marketplace and competition between individuals and companies should drive the economy.

Part of the embrace of free-market economics is free trade. Free trade essentially says that companies and individuals should be able to do business across national borders without interference. It should be no different in theory for a compnay in America to buy from a company in China than it is for a company in Mississippi to buy from a company in Alabama. Governments have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure. Many American companies have taken advantage of free trade policies to send American jobs overseas.  However, many foreign companies have brough jobs to America. The Nissan plant in Canton, MS is a good example of this.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors—consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization.

To find the right balance between benefits and costs associated with globalization, citizens of all nations need to understand how globalization works and the policy choices facing them and their societies. You will live with globalization throughout your life.  It will enhance your life experiences, but also present challenges.  As a citizen of the world in the 21st century you must have a clear understanding of globalization.