Globalization has been defined as the intensification of worldwide economic exchanges and a growth in the international production, integration and trade of commodities.
Indeed, globalization is one of the root causes for economic development, not just in America but also all across the world. So what are some signs that globalization is happening?
Foreign companies are setting up subsidiaries in local markets to maximize profits by lowering their costs while still benefiting from strong demand at home. The global flows of goods and services, capital, information and technology continues unabated.
Many companies competing on a global scale rely on international operations to generate enough profit to generate new investment funds. More advanced information and communications technologies have allowed corporations to establish direct links with suppliers, customers and competitors around the world.
New online shopping services such as www.amazon.com make it easy for shoppers to comparison shop and buy merchandise from distant locations. Domestic firms that use globalization to their advantage can also use it as a defense mechanism if their own government tries to take them over, as they may be able to make better use of foreign expertise, technology and resources at home than their domestic competitor could do by itself.
The growing international flow of goods, people, money and information in the modern world has led some scholars to refer to the global economy as a ‘world-system. This economic relationship between countries that free trade is supposed to make possible is sometimes referred to as a world-system.
Globalization has also been compared to the emergence of a modern world-system during the colonial era, when Europeans first established trade networks across the globe. In the 1960s and 1970s, traditional nation states were replaced by regional and global collaborations whose participants were often multinational corporations rather than individual governments.
Some scholars see globalization as a positive development while others see it as a threat to national sovereignty and identity. Some critics view globalization as an oppressive force that undermines national identity by eroding cultural differences between one nation and another.
The concept of globalization has also been criticized as a cover for various forms of aggression and exploitation, in particular the exploitation of poor nations by wealthy ones. Efforts have been made to recast globalization as a strategy by which elites can shift their own country’s wealth abroad and reduce their own domestic taxation.
The top one percent earned more than 20% of American income in 2000, up from 8% in 1976. A 2001 World Bank study found that “the poorest 40 percent of the world’s population accounts for 5 per cent of global personal consumption expenditures.”
Correspondingly, the richest 20 percent consumes three-quarters of all goods and services while the poorest fifth consumes just 2%.