{"id":7933,"date":"2019-07-19T12:44:09","date_gmt":"2019-07-19T12:44:09","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wmopen-introtosociology\/chapter\/globalization\/"},"modified":"2020-07-03T21:22:55","modified_gmt":"2020-07-03T21:22:55","slug":"globalization-and-the-economy","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-esc-introtosociology\/chapter\/globalization-and-the-economy\/","title":{"raw":"Globalization and the Economy","rendered":"Globalization and the Economy"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Define globalization and describe its manifestation in modern society<\/li>\r\n \t<li>Discuss the pros and cons of globalization<\/li>\r\n<\/ul>\r\n<\/div>\r\nYou've already learned about globalization as it applies to culture and technology, stratification, and inequality. In this context, you'll examine its application as it connects to a global economy, as well as the benefits and drawbacks to globalization.\r\n\r\n<img class=\"aligncenter wp-image-6212\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2034\/2016\/06\/08185916\/McDonalds_in_St_Petersburg_2004.jpg\" alt=\"This picture is of the outside of the fast food chain McDonald's. &quot;McDonald's&quot; is spelled using the Cyrillic alphabet since this McDonalds is located in Russia. \" width=\"481\" height=\"361\" \/>\r\n\r\nOften the countries that fare the worst are those that depend on natural resource extraction for their wealth. Many critics fear globalization gives too much power to multinational corporations and that political decisions are influenced by these major financial players.\r\n\r\n[caption id=\"\" align=\"alignright\" width=\"400\"]<img src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/120\/2016\/04\/15204650\/Figure_18_02_01.jpg\" alt=\"A city skyline is shown here.\" width=\"400\" height=\"188\" \/> <strong>Figure 1.\u00a0<\/strong>Instant communications have allowed many international corporations to move parts of their businesses to countries such as India, where labor and production costs are lower, and where environmental laws are weaker or non-existent. (Photo courtesy of Wikimedia Commons)[\/caption]\r\n<h2>What Is Globalization?<\/h2>\r\n<p id=\"import-auto-id2673156\"><strong>Globalization<\/strong> refers to the process of integrating governments, cultures, and financial markets through international trade into a single world market.<\/p>\r\nOften 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.\r\n<p id=\"import-auto-id1372320\">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.<\/p>\r\n<p id=\"import-auto-id1348970\">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 of Donald Trump and a heightened concern about border crossings into the United States. On September 30, 2018, it was announced that the United States, Mexico, and Canada had come to an agreement to replace NAFTA with the United States\u2013Mexico\u2013Canada Agreement (USMCA). The USMCA is the result of the renegotiation of NAFTA that the member states undertook from 2017 to 2018, and though it was signed by each nation's leader, as of May 2019, it was not yet ratified.\u00a0<span style=\"color: #ff00ff\">\r\n<\/span><\/p>\r\n<p id=\"import-auto-id2674760\">There are several forces driving globalization, including the global economy and multinational corporations that control assets, sales, production, and employment (United Nations, 1973). Characteristics of multinational corporations include the following: A large share of their capital is collected from a variety of nations, their business is conducted without regard to national borders, they concentrate wealth in the hands of core nations and already wealthy individuals, and they play a key role in the global economy.<\/p>\r\n<span style=\"color: #333333\">Another impact of globalization is<\/span>\u00a0the emergence of <strong><span id=\"import-auto-id2784668\">global assembly lines<\/span><\/strong>, where products are assembled over the course of several international transactions. For instance, Apple designs its next-generation Mac prototype in the United States, components are made in various peripheral nations, they are then shipped to another peripheral nation such as Malaysia for assembly, and tech support is outsourced to India.\r\n\r\nGlobalization has also led to the development of <strong>global commodity chains<\/strong>, where internationally integrated economic links connect workers and corporations for the purpose of manufacture and marketing (Plahe, 2005). For example, in <em>maquiladoras<\/em>, mostly found in northern Mexico, workers may sew imported precut pieces of fabric into garme<span style=\"color: #333333\">nts. Furthermore, globaliz<\/span>ation also brings an international division of labor, in which comparatively wealthy workers from core nations compete with the low-wage labor pool of peripheral and semi-peripheral nations. This can lead to a sense of <strong>xenophobia<\/strong>, which is an illogical fear and even hatred of foreigners and foreign goods. Corporations trying to maximize their profits in the United States are conscious of this risk and attempt to \u201cAmericanize\u201d their products, selling shirts printed with U.S. flags that were nevertheless made in Mexico or elsewhere.\r\n\r\n<section id=\"fs-id1165528322647\">\r\n<h2>Aspects of Globalization<\/h2>\r\n<p id=\"import-auto-id2876187\">Globalized trade is nothing new. Societies in ancient Greece and Rome traded with other societies in Africa, the Middle East, India, and China. Trade expanded further during the Islamic Golden Age and after the rise of the Mongol Empire. The establishment of colonial empires after the voyages of discovery by European countries meant that trade was going on all over the world. In the nineteenth century, the Industrial Revolution led to even more trade of ever-increasing amounts of goods. However, the advance of technology, especially communications, after World War II and the Cold War, triggered the explosive expansion of global markets that we see today.<\/p>\r\n\r\n<div class=\"textbox key-takeaways\">\r\n<h3>Further Research<\/h3>\r\n<p id=\"import-auto-id1302479\">The World Social Forum (WSF) was created in response to the creation of the\u00a0<a href=\"https:\/\/www.weforum.org\/\" target=\"_blank\" rel=\"noopener\">World Economic Forum (WEF)<\/a>. The WSF is a coalition of organizations dedicated to the idea of a worldwide civil society and presents itself as an alternative to WEF, which it says is too focused on capitalism.<\/p>\r\n\r\n<\/div>\r\n<p id=\"import-auto-id1395338\">One way to look at the similarities and differences that exist among the economies of different nations is to compare their standards of living. The statistic most commonly used to do this is the domestic product per capita. This is the gross domestic product, or GDP, of a country divided by its population. The table below compares the top 11 countries with the bottom 11 out of the 228 countries listed in the <em>CIA World Factbook<\/em>.<\/p>\r\n\r\n<table id=\"import-auto-id1219278\" class=\" undefined aligncenter\" summary=\"This table is titled \u201cGross Domestic Product per Capita.\u201d There are three columns, and starting from the left column, they are titled \u201cRank,\u201d \u201cCountry,\u201d and \u201cGDP \u2013 per capita (PPP).\u201d The table jumps from the wealthiest countries, to the poorest countries. Rank 1 is Qatar with a GDP of 02,100. Rank 2 is Liechtenstein with a GDP of $89,400. Rank 3 is Macau with a GDP of $88,700. Rank 4 is Bermuda with a GDP of $86,000. Rank 5 is Monaco with a GDP of $85,500. Rank 6 is Luxembourg with a GDP of $77,900. Rank 7 is Singapore with a GDP of $62,400. Rank 8 is Jersey with a GDP of $57,000. Rank 9 is Norway with a GDP of $55,400. Rank 10 is the Falkland Islands (Islas Malvinas) with a GDP of $55,400. Rank 11 is Switzerland with a GDP of $54,800. Rank 218 is Guinea with a GDP of ,100. Rank 219 is Tokelau with a GDP of ,000. Rank 220 is Madagascar with a GDP of ,000. Rank 221 is Malawi with a GDP of $900. Rank 222 is Niger with a GDP of $800. Rank 223 is Liberia with a GDP of $700. Rank 224 is the Central African Republic with a GDP of $700. Rank 225 is Burundi with a GDP of $600. Rank 226 is Somalia with a GDP of $600. Rank 227 is Zimbabwe with a GDP of $600. Rank 228 is the Democratic Republic of Congo with a GDP of $400.\"><caption>Not every country is benefitting from globalization. The GDP per capita of the poorest country is 255 times less than that of the wealthiest country. (Table courtesy of the CIA, World Factbook 2014)<\/caption>\r\n<thead>\r\n<tr>\r\n<th style=\"text-align: center\" colspan=\"3\">Gross Domestic Product Per Capita<\/th>\r\n<\/tr>\r\n<tr>\r\n<th style=\"text-align: center\">Rank<\/th>\r\n<th style=\"text-align: center\">Country<\/th>\r\n<th>\r\n<p style=\"text-align: center\">GDP - per capita<\/p>\r\n\r\n<div><\/div>\r\n<p style=\"text-align: center\">(PPP)<\/p>\r\n<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>1<\/td>\r\n<td>Qatar<\/td>\r\n<td>$102,100<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>2<\/td>\r\n<td>Liechtenstein<\/td>\r\n<td>$89,400<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>3<\/td>\r\n<td>Macau<\/td>\r\n<td>$88,700<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>4<\/td>\r\n<td>Bermuda<\/td>\r\n<td>$86,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>5<\/td>\r\n<td>Monaco<\/td>\r\n<td>$85,500<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>6<\/td>\r\n<td>Luxembourg<\/td>\r\n<td>$77,900<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>7<\/td>\r\n<td>Singapore<\/td>\r\n<td>$62,400<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>8<\/td>\r\n<td>Jersey<\/td>\r\n<td>$57,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>9<\/td>\r\n<td>Norway<\/td>\r\n<td>$55,400<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>10<\/td>\r\n<td>Falkland Islands (Islas Malvinas)<\/td>\r\n<td>$55,400<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>11<\/td>\r\n<td>Switzerland<\/td>\r\n<td>$54,800<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>218<\/td>\r\n<td>Guinea<\/td>\r\n<td>$1,100<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>219<\/td>\r\n<td>Tokelau<\/td>\r\n<td>$1,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>220<\/td>\r\n<td>Madagascar<\/td>\r\n<td>$1,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>221<\/td>\r\n<td>Malawi<\/td>\r\n<td>$900<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>222<\/td>\r\n<td>Niger<\/td>\r\n<td>$800<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>223<\/td>\r\n<td>Liberia<\/td>\r\n<td>$700<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>224<\/td>\r\n<td>Central African Republic<\/td>\r\n<td>$700<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>225<\/td>\r\n<td>Burundi<\/td>\r\n<td>$600<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>226<\/td>\r\n<td>Somalia<\/td>\r\n<td>$600<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>227<\/td>\r\n<td>Zimbabwe<\/td>\r\n<td>$600<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>228<\/td>\r\n<td>Congo, Democratic Republic of the<\/td>\r\n<td>$400<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p id=\"import-auto-id1824480\">There are benefits and drawbacks to globalization. Some of the benefits include the exponentially accelerated progress of development, the creation of international awareness and empowerment, and the potential for increased wealth (Abedian, 2002). However, experience has shown that countries can also be weakened by globalization. Some critics of globalization worry about the growing influence of enormous international financial and industrial corporations that benefit the most from free trade and unrestricted markets. They fear these corporations can use their vast wealth and resources to control governments to act in their interest rather than that of the local population (Bakan, 2004). Indeed, when looking at the countries at the bottom of the list above, we are looking at places where the primary benefactors of mineral exploitation are major corporations and a few key political figures.<\/p>\r\n\r\n<div class=\"textbox exercises\">\r\n<h3>The Dark Side of Globalization<\/h3>\r\nGlobalization isn't always a beneficial thing. This article by Andreas Exenberger and Simon Hartmann on the <a href=\"https:\/\/www.econstor.eu\/bitstream\/10419\/71951\/1\/74242488X.pdf\" target=\"_blank\" rel=\"noopener\">dark side of globalization<\/a> details some of the devastating consequences of globalization in the Congo.\r\n\r\nYou can also watch this Crash Course History video about globalization to better understand its pros and cons:\u00a0<a href=\"https:\/\/www.youtube.com\/watch?v=s_iwrt7D5OA&amp;feature=youtu.be\" target=\"_blank\" rel=\"noopener\">Globalization II - Good or Bad?<\/a>\r\n\r\n<\/div>\r\n<p id=\"import-auto-id1411192\">Other critics oppose globalization for what they see as negative impacts on the environment and local economies. Rapid industrialization, often a key component of globalization, can lead to widespread economic damage due to the lack of regulatory guidelines (Speth, 2003). Further, as there are often no social institutions in place to protect workers in countries where jobs are scarce, some critics state that globalization leads to weak labor movements (Boswell and Stevis, 1997). Finally, critics are concerned that wealthy countries can force economically weaker nations to open their markets while protecting their own local products from competition (Wallerstein, 1974). This can be particularly true of agricultural products, which are often one of the main exports of poor and developing countries (Koroma, 2007). In a 2007 article for the United Nations, Koroma discusses the difficulties faced by \u201cleast developed countries\u201d (LDCs) that seek to participate in globalization efforts. These countries typically lack the infrastructure to be flexible and nimble in their production and trade, and therefore are vulnerable to everything from unfavorable weather conditions to international price volatility. In short, rather than offering them more opportunities, the increased competition and fast pace of a globalized market can make it more challenging than ever for LDCs to move forward (Koroma, 2007).<\/p>\r\n<p id=\"import-auto-id1490136\">The increasing use of outsourcing of manufacturing and service-industry jobs to developing countries has caused increased unemployment in some developed countries. Countries that do not develop new jobs to replace those that move, and train their labor force to do them, will find support for globalization weakening.<\/p>\r\n<p style=\"text-align: center\"><strong>This video illustrates some of the sociological advantages and disadvantages of globalization.<\/strong>\r\n[embed]https:\/\/www.youtube.com\/embed\/GmomzubjO1I[\/embed]<\/p>\r\n\r\n<\/section><section id=\"fs-id1165528340934\" class=\"short-answer\">\r\n<div class=\"textbox learning-objectives\">\r\n<h3>Think It Over<\/h3>\r\n<div id=\"fs-id1165528356863\" class=\"exercise\">\r\n<div id=\"fs-id1165528356864\" class=\"problem\">\r\n<ul>\r\n \t<li id=\"import-auto-id2347543\">What impact has globalization had on the music you listen to, the books you read, or the movies or television you watch?<\/li>\r\n \t<li>What effect can immigration have on the economy of a developing country?<\/li>\r\n \t<li>Is globalization a danger to local cultures? Why, or why not?<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<div>\r\n<div class=\"textbox key-takeaways\">\r\n<h3>Glossary<\/h3>\r\n<dl>\r\n \t<dt>global assembly lines:<\/dt>\r\n \t<dd>a practice where products are assembled over the course of several international transactions<\/dd>\r\n<\/dl>\r\n<dl id=\"import-auto-id2690888\" class=\"definition\">\r\n \t<dt>global commodity chains:<\/dt>\r\n \t<dd id=\"fs-id1165528318813\">internationally integrated economic links that connect workers and corporations for the purpose of manufacture and marketing<\/dd>\r\n<\/dl>\r\n<dl class=\"definition\">\r\n \t<dt>xenophobia:<\/dt>\r\n \t<dd id=\"fs-id1165528318105\">an illogical fear and even hatred of foreigners and foreign goods<\/dd>\r\n<\/dl>\r\n<\/div>\r\n<\/div>\r\n<\/section>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Define globalization and describe its manifestation in modern society<\/li>\n<li>Discuss the pros and cons of globalization<\/li>\n<\/ul>\n<\/div>\n<p>You&#8217;ve already learned about globalization as it applies to culture and technology, stratification, and inequality. In this context, you&#8217;ll examine its application as it connects to a global economy, as well as the benefits and drawbacks to globalization.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-6212\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2034\/2016\/06\/08185916\/McDonalds_in_St_Petersburg_2004.jpg\" alt=\"This picture is of the outside of the fast food chain McDonald's. &quot;McDonald's&quot; is spelled using the Cyrillic alphabet since this McDonalds is located in Russia.\" width=\"481\" height=\"361\" \/><\/p>\n<p>Often the countries that fare the worst are those that depend on natural resource extraction for their wealth. Many critics fear globalization gives too much power to multinational corporations and that political decisions are influenced by these major financial players.<\/p>\n<div style=\"width: 410px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/120\/2016\/04\/15204650\/Figure_18_02_01.jpg\" alt=\"A city skyline is shown here.\" width=\"400\" height=\"188\" \/><\/p>\n<p class=\"wp-caption-text\"><strong>Figure 1.\u00a0<\/strong>Instant communications have allowed many international corporations to move parts of their businesses to countries such as India, where labor and production costs are lower, and where environmental laws are weaker or non-existent. (Photo courtesy of Wikimedia Commons)<\/p>\n<\/div>\n<h2>What Is Globalization?<\/h2>\n<p id=\"import-auto-id2673156\"><strong>Globalization<\/strong> refers to the process of integrating governments, cultures, and financial markets through international trade into a single world market.<\/p>\n<p>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.<\/p>\n<p id=\"import-auto-id1372320\">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.<\/p>\n<p id=\"import-auto-id1348970\">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 of Donald Trump and a heightened concern about border crossings into the United States. On September 30, 2018, it was announced that the United States, Mexico, and Canada had come to an agreement to replace NAFTA with the United States\u2013Mexico\u2013Canada Agreement (USMCA). The USMCA is the result of the renegotiation of NAFTA that the member states undertook from 2017 to 2018, and though it was signed by each nation&#8217;s leader, as of May 2019, it was not yet ratified.\u00a0<span style=\"color: #ff00ff\"><br \/>\n<\/span><\/p>\n<p id=\"import-auto-id2674760\">There are several forces driving globalization, including the global economy and multinational corporations that control assets, sales, production, and employment (United Nations, 1973). Characteristics of multinational corporations include the following: A large share of their capital is collected from a variety of nations, their business is conducted without regard to national borders, they concentrate wealth in the hands of core nations and already wealthy individuals, and they play a key role in the global economy.<\/p>\n<p><span style=\"color: #333333\">Another impact of globalization is<\/span>\u00a0the emergence of <strong><span id=\"import-auto-id2784668\">global assembly lines<\/span><\/strong>, where products are assembled over the course of several international transactions. For instance, Apple designs its next-generation Mac prototype in the United States, components are made in various peripheral nations, they are then shipped to another peripheral nation such as Malaysia for assembly, and tech support is outsourced to India.<\/p>\n<p>Globalization has also led to the development of <strong>global commodity chains<\/strong>, where internationally integrated economic links connect workers and corporations for the purpose of manufacture and marketing (Plahe, 2005). For example, in <em>maquiladoras<\/em>, mostly found in northern Mexico, workers may sew imported precut pieces of fabric into garme<span style=\"color: #333333\">nts. Furthermore, globaliz<\/span>ation also brings an international division of labor, in which comparatively wealthy workers from core nations compete with the low-wage labor pool of peripheral and semi-peripheral nations. This can lead to a sense of <strong>xenophobia<\/strong>, which is an illogical fear and even hatred of foreigners and foreign goods. Corporations trying to maximize their profits in the United States are conscious of this risk and attempt to \u201cAmericanize\u201d their products, selling shirts printed with U.S. flags that were nevertheless made in Mexico or elsewhere.<\/p>\n<section id=\"fs-id1165528322647\">\n<h2>Aspects of Globalization<\/h2>\n<p id=\"import-auto-id2876187\">Globalized trade is nothing new. Societies in ancient Greece and Rome traded with other societies in Africa, the Middle East, India, and China. Trade expanded further during the Islamic Golden Age and after the rise of the Mongol Empire. The establishment of colonial empires after the voyages of discovery by European countries meant that trade was going on all over the world. In the nineteenth century, the Industrial Revolution led to even more trade of ever-increasing amounts of goods. However, the advance of technology, especially communications, after World War II and the Cold War, triggered the explosive expansion of global markets that we see today.<\/p>\n<div class=\"textbox key-takeaways\">\n<h3>Further Research<\/h3>\n<p id=\"import-auto-id1302479\">The World Social Forum (WSF) was created in response to the creation of the\u00a0<a href=\"https:\/\/www.weforum.org\/\" target=\"_blank\" rel=\"noopener\">World Economic Forum (WEF)<\/a>. The WSF is a coalition of organizations dedicated to the idea of a worldwide civil society and presents itself as an alternative to WEF, which it says is too focused on capitalism.<\/p>\n<\/div>\n<p id=\"import-auto-id1395338\">One way to look at the similarities and differences that exist among the economies of different nations is to compare their standards of living. The statistic most commonly used to do this is the domestic product per capita. This is the gross domestic product, or GDP, of a country divided by its population. The table below compares the top 11 countries with the bottom 11 out of the 228 countries listed in the <em>CIA World Factbook<\/em>.<\/p>\n<table id=\"import-auto-id1219278\" class=\"undefined aligncenter\" summary=\"This table is titled \u201cGross Domestic Product per Capita.\u201d There are three columns, and starting from the left column, they are titled \u201cRank,\u201d \u201cCountry,\u201d and \u201cGDP \u2013 per capita (PPP).\u201d The table jumps from the wealthiest countries, to the poorest countries. Rank 1 is Qatar with a GDP of 02,100. Rank 2 is Liechtenstein with a GDP of $89,400. Rank 3 is Macau with a GDP of $88,700. Rank 4 is Bermuda with a GDP of $86,000. Rank 5 is Monaco with a GDP of $85,500. Rank 6 is Luxembourg with a GDP of $77,900. Rank 7 is Singapore with a GDP of $62,400. Rank 8 is Jersey with a GDP of $57,000. Rank 9 is Norway with a GDP of $55,400. Rank 10 is the Falkland Islands (Islas Malvinas) with a GDP of $55,400. Rank 11 is Switzerland with a GDP of $54,800. Rank 218 is Guinea with a GDP of ,100. Rank 219 is Tokelau with a GDP of ,000. Rank 220 is Madagascar with a GDP of ,000. Rank 221 is Malawi with a GDP of $900. Rank 222 is Niger with a GDP of $800. Rank 223 is Liberia with a GDP of $700. Rank 224 is the Central African Republic with a GDP of $700. Rank 225 is Burundi with a GDP of $600. Rank 226 is Somalia with a GDP of $600. Rank 227 is Zimbabwe with a GDP of $600. Rank 228 is the Democratic Republic of Congo with a GDP of $400.\">\n<caption>Not every country is benefitting from globalization. The GDP per capita of the poorest country is 255 times less than that of the wealthiest country. (Table courtesy of the CIA, World Factbook 2014)<\/caption>\n<thead>\n<tr>\n<th style=\"text-align: center\" colspan=\"3\">Gross Domestic Product Per Capita<\/th>\n<\/tr>\n<tr>\n<th style=\"text-align: center\">Rank<\/th>\n<th style=\"text-align: center\">Country<\/th>\n<th>\n<p style=\"text-align: center\">GDP &#8211; per capita<\/p>\n<div><\/div>\n<p style=\"text-align: center\">(PPP)<\/p>\n<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>1<\/td>\n<td>Qatar<\/td>\n<td>$102,100<\/td>\n<\/tr>\n<tr>\n<td>2<\/td>\n<td>Liechtenstein<\/td>\n<td>$89,400<\/td>\n<\/tr>\n<tr>\n<td>3<\/td>\n<td>Macau<\/td>\n<td>$88,700<\/td>\n<\/tr>\n<tr>\n<td>4<\/td>\n<td>Bermuda<\/td>\n<td>$86,000<\/td>\n<\/tr>\n<tr>\n<td>5<\/td>\n<td>Monaco<\/td>\n<td>$85,500<\/td>\n<\/tr>\n<tr>\n<td>6<\/td>\n<td>Luxembourg<\/td>\n<td>$77,900<\/td>\n<\/tr>\n<tr>\n<td>7<\/td>\n<td>Singapore<\/td>\n<td>$62,400<\/td>\n<\/tr>\n<tr>\n<td>8<\/td>\n<td>Jersey<\/td>\n<td>$57,000<\/td>\n<\/tr>\n<tr>\n<td>9<\/td>\n<td>Norway<\/td>\n<td>$55,400<\/td>\n<\/tr>\n<tr>\n<td>10<\/td>\n<td>Falkland Islands (Islas Malvinas)<\/td>\n<td>$55,400<\/td>\n<\/tr>\n<tr>\n<td>11<\/td>\n<td>Switzerland<\/td>\n<td>$54,800<\/td>\n<\/tr>\n<tr>\n<td>218<\/td>\n<td>Guinea<\/td>\n<td>$1,100<\/td>\n<\/tr>\n<tr>\n<td>219<\/td>\n<td>Tokelau<\/td>\n<td>$1,000<\/td>\n<\/tr>\n<tr>\n<td>220<\/td>\n<td>Madagascar<\/td>\n<td>$1,000<\/td>\n<\/tr>\n<tr>\n<td>221<\/td>\n<td>Malawi<\/td>\n<td>$900<\/td>\n<\/tr>\n<tr>\n<td>222<\/td>\n<td>Niger<\/td>\n<td>$800<\/td>\n<\/tr>\n<tr>\n<td>223<\/td>\n<td>Liberia<\/td>\n<td>$700<\/td>\n<\/tr>\n<tr>\n<td>224<\/td>\n<td>Central African Republic<\/td>\n<td>$700<\/td>\n<\/tr>\n<tr>\n<td>225<\/td>\n<td>Burundi<\/td>\n<td>$600<\/td>\n<\/tr>\n<tr>\n<td>226<\/td>\n<td>Somalia<\/td>\n<td>$600<\/td>\n<\/tr>\n<tr>\n<td>227<\/td>\n<td>Zimbabwe<\/td>\n<td>$600<\/td>\n<\/tr>\n<tr>\n<td>228<\/td>\n<td>Congo, Democratic Republic of the<\/td>\n<td>$400<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p id=\"import-auto-id1824480\">There are benefits and drawbacks to globalization. Some of the benefits include the exponentially accelerated progress of development, the creation of international awareness and empowerment, and the potential for increased wealth (Abedian, 2002). However, experience has shown that countries can also be weakened by globalization. Some critics of globalization worry about the growing influence of enormous international financial and industrial corporations that benefit the most from free trade and unrestricted markets. They fear these corporations can use their vast wealth and resources to control governments to act in their interest rather than that of the local population (Bakan, 2004). Indeed, when looking at the countries at the bottom of the list above, we are looking at places where the primary benefactors of mineral exploitation are major corporations and a few key political figures.<\/p>\n<div class=\"textbox exercises\">\n<h3>The Dark Side of Globalization<\/h3>\n<p>Globalization isn&#8217;t always a beneficial thing. This article by Andreas Exenberger and Simon Hartmann on the <a href=\"https:\/\/www.econstor.eu\/bitstream\/10419\/71951\/1\/74242488X.pdf\" target=\"_blank\" rel=\"noopener\">dark side of globalization<\/a> details some of the devastating consequences of globalization in the Congo.<\/p>\n<p>You can also watch this Crash Course History video about globalization to better understand its pros and cons:\u00a0<a href=\"https:\/\/www.youtube.com\/watch?v=s_iwrt7D5OA&amp;feature=youtu.be\" target=\"_blank\" rel=\"noopener\">Globalization II &#8211; Good or Bad?<\/a><\/p>\n<\/div>\n<p id=\"import-auto-id1411192\">Other critics oppose globalization for what they see as negative impacts on the environment and local economies. Rapid industrialization, often a key component of globalization, can lead to widespread economic damage due to the lack of regulatory guidelines (Speth, 2003). Further, as there are often no social institutions in place to protect workers in countries where jobs are scarce, some critics state that globalization leads to weak labor movements (Boswell and Stevis, 1997). Finally, critics are concerned that wealthy countries can force economically weaker nations to open their markets while protecting their own local products from competition (Wallerstein, 1974). This can be particularly true of agricultural products, which are often one of the main exports of poor and developing countries (Koroma, 2007). In a 2007 article for the United Nations, Koroma discusses the difficulties faced by \u201cleast developed countries\u201d (LDCs) that seek to participate in globalization efforts. These countries typically lack the infrastructure to be flexible and nimble in their production and trade, and therefore are vulnerable to everything from unfavorable weather conditions to international price volatility. In short, rather than offering them more opportunities, the increased competition and fast pace of a globalized market can make it more challenging than ever for LDCs to move forward (Koroma, 2007).<\/p>\n<p id=\"import-auto-id1490136\">The increasing use of outsourcing of manufacturing and service-industry jobs to developing countries has caused increased unemployment in some developed countries. Countries that do not develop new jobs to replace those that move, and train their labor force to do them, will find support for globalization weakening.<\/p>\n<p style=\"text-align: center\"><strong>This video illustrates some of the sociological advantages and disadvantages of globalization.<\/strong><br \/>\n<iframe loading=\"lazy\" id=\"oembed-1\" title=\"Globalization- trade and transnational corporations | Society and Culture | MCAT | Khan Academy\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/GmomzubjO1I?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<\/section>\n<section id=\"fs-id1165528340934\" class=\"short-answer\">\n<div class=\"textbox learning-objectives\">\n<h3>Think It Over<\/h3>\n<div id=\"fs-id1165528356863\" class=\"exercise\">\n<div id=\"fs-id1165528356864\" class=\"problem\">\n<ul>\n<li id=\"import-auto-id2347543\">What impact has globalization had on the music you listen to, the books you read, or the movies or television you watch?<\/li>\n<li>What effect can immigration have on the economy of a developing country?<\/li>\n<li>Is globalization a danger to local cultures? Why, or why not?<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<div>\n<div class=\"textbox key-takeaways\">\n<h3>Glossary<\/h3>\n<dl>\n<dt>global assembly lines:<\/dt>\n<dd>a practice where products are assembled over the course of several international transactions<\/dd>\n<\/dl>\n<dl id=\"import-auto-id2690888\" class=\"definition\">\n<dt>global commodity chains:<\/dt>\n<dd id=\"fs-id1165528318813\">internationally integrated economic links that connect workers and corporations for the purpose of manufacture and marketing<\/dd>\n<\/dl>\n<dl class=\"definition\">\n<dt>xenophobia:<\/dt>\n<dd id=\"fs-id1165528318105\">an illogical fear and even hatred of foreigners and foreign goods<\/dd>\n<\/dl>\n<\/div>\n<\/div>\n<\/section>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-7933\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Introduction to Globalization and the Economy. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Globalization and the Economy. <strong>Authored by<\/strong>: OpenStax CNX. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/cnx.org\/contents\/AgQDEnLI@10.1:X-GQNJpT@2\/Globalization-and-the-Economy\">https:\/\/cnx.org\/contents\/AgQDEnLI@10.1:X-GQNJpT@2\/Globalization-and-the-Economy<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em>. <strong>License Terms<\/strong>: Download for free at http:\/\/cnx.org\/contents\/02040312-72c8-441e-a685-20e9333f3e1d@3.49<\/li><li>Modification, adaptation, and original content. <strong>Authored by<\/strong>: Rebecca Vonderhaar for Lumen Learning. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>North American Free Trade Agreement. <strong>Provided by<\/strong>: Wikipedia. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/en.wikipedia.org\/wiki\/North_American_Free_Trade_Agreement\">https:\/\/en.wikipedia.org\/wiki\/North_American_Free_Trade_Agreement<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>McDonalds in St. Petersburg . <strong>Authored by<\/strong>: Dirk Ingo Franke. <strong>Provided by<\/strong>: Wikimedia Commons. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:McDonalds_in_St_Petersburg_2004.JPG\">https:\/\/commons.wikimedia.org\/wiki\/File:McDonalds_in_St_Petersburg_2004.JPG<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Globalization- trade and transnational corporations. <strong>Provided by<\/strong>: Khan Academy. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=GmomzubjO1I&#038;feature=youtu.be\">https:\/\/www.youtube.com\/watch?v=GmomzubjO1I&#038;feature=youtu.be<\/a>. <strong>License<\/strong>: <em>Other<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":29,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Globalization and the Economy\",\"author\":\"OpenStax CNX\",\"organization\":\"\",\"url\":\"https:\/\/cnx.org\/contents\/AgQDEnLI@10.1:X-GQNJpT@2\/Globalization-and-the-Economy\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Download for free at http:\/\/cnx.org\/contents\/02040312-72c8-441e-a685-20e9333f3e1d@3.49\"},{\"type\":\"cc\",\"description\":\"Modification, adaptation, and original content\",\"author\":\"Rebecca Vonderhaar for Lumen Learning\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"Globalization- trade and transnational corporations\",\"author\":\"\",\"organization\":\"Khan 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