Globalization: Economic, Political, Social, and Environmental Impacts

Posted on Dec 13, 2024 in Social sciences

Globalization is the process of building a single economic space on a global scale in which the production and circulation of goods and services are governed by the laws of the market. Its expansion is based on new technologies that multiply the capacity to generate and transmit information, enabling companies to operate synchronously and in real-time, encouraging financial concentration. Production and markets are met, establishing a dense network of streams that interconnect companies and territories. The importance of the distance factor is reduced, creating the myth of the world becoming a global village.

Causes of Globalization

The causes of globalization are:

  1. Improvements in transport facilitate the movement of goods and people worldwide and make more distant spaces available.
  2. Progress in telecommunications (satellite, internet, fax, mobile, television) facilitates interrelationships of all kinds worldwide. As a result, physical distance between regions no longer influences, and the world becomes a global village.
  3. The generalization of the capitalist system is based on private property, free competition between companies, and the desire to achieve maximum benefits. The near-global extension of the capitalist system has been facilitated by the virtual disappearance of communist economies since the early 1990s and the decline of self-consumption economies.
  4. The extension of neoliberal ideology, based on full freedom of markets and the disappearance of trade barriers, facilitates the development of world trade of all types.
  5. The action of certain agents, such as multinational corporations and international organizations, promotes the overall functioning of the economy and makes decisions of global political, social, cultural, and environmental impact.

The international organizations that promote the process of globalization are the World Trade Organization (WTO), the International Monetary Fund (IMF), and the UN.

The Operation of Globalization

Economic Globalization

Economic globalization involves global interdependence in the production, exchange, and consumption of goods.

  1. Production tends to be organized on a global scale as technologies enable the manufacturing process to be divided into phases and located in the most advantageous spaces. This strategy is used especially by multinational companies that locate their subsidiaries in areas that offer more advantages in natural resources or labor markets.
  2. The exchange of goods, capital, services, information, and technology spreads throughout the world due to the progressive elimination of trade barriers and the creation of regional free trade agreements between countries. Furthermore, exchanges move at high speed through the development of transport and telecommunications.
  3. Consumption tends to be the same throughout the planet, as large companies spread certain tastes and behaviors through advertising and media.

Political, Social, Cultural, and Environmental Globalization

Globalization also affects the political, social, cultural, and environmental spheres:

  1. In the international geopolitical arena, after the end of the Cold War (1990), the U.S. became the only world superpower. The country, along with two other large pockets of the capitalist economy, the European Union and Japan, forms the so-called Triad of power. Its global influence is enormous, given the importance it has in major international organizations, whose guidelines mark decisive policies of many states on Earth.
  2. In the social field, the labor market of skilled and unskilled workers is globalized through international migration.
  3. In the cultural field, science, art, cultural models, and communications have become global. For example, artistic and musical models are equal and imposed on a global scale thanks to their rapid spread by the media and advertising of major companies.
  4. In the environmental field, problems also achieve global scale (greenhouse effect, decreasing ozone layer, deforestation).

Consequences of Globalization

The positive and negative consequences of globalization are:

  1. In the economic field, it increases the possibilities of trade and business for companies. But it also raises the weight of large multinationals to the detriment of domestic firms and small businesses.
  2. In the political field, it limits the autonomy of countries, which are conditioned by the interests of great powers and by the power of multinational corporations. It also creates political instability in some areas of the world where governments impose extreme reactions to Western ways of doing politics.
  3. In the social realm, globalization increases the standard of living and employment, but it also threatens working conditions through flexibility, job insecurity, and declining wages. It facilitates the mobility of the population but stimulates migration movements between rich and poor countries. It also disseminates medical and health advances, but also problems such as AIDS and international criminal networks (mafias, drug trafficking, terrorism).
  4. In the cultural sphere, globalization spreads science, technology, and culture. But it can cause a loss of cultural identity in certain populations.
  5. In the environmental field, globalization promotes awareness and international agreements on environmental issues. But it also produces a large ecological impact because it promotes an economic model based on the unlimited growth of production and consumption.
  6. In the international arena, globalization increases global integration. But it promotes an international division of labor, which increases inequalities between regions.

Antiglobalization Movements

In response to the negative consequences of globalization, antiglobalization movements have emerged. They are composed of very diverse organizations.