The most American car is a Honda, product of a Japanese
corporation. This is one example of the impact of globalization. Globalization is the process of increased
interconnectedness among countries most notably in the areas of economics,
politics, and culture.
The affects can be understood by looking at trends and
specific examples of the process.
Social Environment – Economic
In the 70s America and many other western nations took their
currencies off the gold standard thus ending a period of currency fixed to
reserve currencies or precious metals.
This allowed for floating currencies whose exchange rates are based upon
supply and demand and created worldwide markets in currency. This action allowed countries to influence
economic fluctuations via fiscal and monetary policies.
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Commercial trade between countries significantly increased accelerating
commercial interdependence. World trade
increased nearly tenfold between 1973 and 1998, reaching 42% of world GDP.
It produced a shift in international division of labor; the
biggest shift came from East Asia. Japan’s
share of world trade doubled during that period and China’s almost tripled. A large percentage of manufacturing and its
associated labor was moved from the West to Asia and South America. During this period the output of East Asia
doubled.
This shift has had a devastating impact on America. Over the past 12 years, U.S. manufacturers
have cut 31 percent of their workforce, or nearly 6 million workers.
Their contribution to gross domestic product fell to 12.2 percent in 2011
from 22.7 percent in 1970.
The main financier of global loans was the International
Monetary Fund (IMF). Their purpose is to
enhance the economies of its member nations.
A condition of their loans was that the recipients adopt more modern
fiscal policies. Their financial help
has aided many countries to grow their economies.
The European answer to this growing problem was to create a
single European currency, the Euro. That currency is now the second largest reserve
currency as well as the second most traded currency in the world
after the United States dollar.
Social Environment - Technology
Technology acted as enabler to many global processes. The Internet, that became the backbone of
online stock trading, integrated trading across the world.
The percentage of technical products in world trade has doubled
while percentage of basic products decreased by 50%. Thus, countries with an educated workforce
gained substantially while those that didn’t remained poor. This divided the world financially into
countries that have knowledge workers and those who don’t.
Social Environment - Migration
Just as earlier migration resulted from people leaving an agrarian
life to move to the industrialized city, globalization encouraged a large
migration from poor countries to rich ones.
The number of immigrants doubled during this period.
Because of the nationalism present in European countries,
they did not readily accept these workers on a permanent basis, but as guest
workers. As a result they were not
easily integrated into these societies.
Japan had the same issue, encouraging temporary workers, but having
social policies that were very hostile leading to discrimination and
exclusion.
Because of the history of immigration to their nation,
Americans were more willing to allow immigrants to become citizens. By 2000 the percentage of immigrants in the
country had doubled. However, the issue
between residence and citizenship arose even there.
In summary, this great migration has been met with mixed
reactions. Business was more than
willing to accept competent employees who were willing to do work many natives
wouldn’t and would accept lower wages.
Conversely, many citizens attempted to exclude the immigrants from the
mainstream culture. This has generally led
to increased concerns over the ethnic makeup of local communities.
Social Environment - Culture
Historically, culture has been limited by geographical proximity. That is, people who lived and worked in a
relatively close geographical area would have a common culture. Globalization would have a big impact in two
ways. Existing local cultures would integrate
components of the culture of the new immigrants, and local culture of many
countries, especially America, would be transported to the rest of the world via
the discovery of new media methods.
Thus, the introduction of both audio and video tape media
allowed culture to spread globally. American
music, films, and television shows would be seen in most countries of the
world. Reggae, a Jamaican musical genre,
became popular in England and Canada where West Indian people had moved in the
sixties and seventies.
Sporting events, which are a component of culture, also
became globalized in a similar manner.
Local sports teams began to import sports stars from other countries,
and local sports like American basketball become popular in many other
countries.
The globalization of culture created a global stage viewable
through new media by virtually all nations creating an increasing homogeneous
world culture.
While economics, migration, and culture produced physical
global networks, communication technology produced logical global
networks. The combination of satellites and
personal computers created in the 70s, along with the World Wide Web produced
the Internet. This allowed for worldwide
communication that made it easier than communicating with neighbors and
cheaper. It also made available an
immense amount of information to virtually anyone who was connected with the Internet.
Natural Environment
Along with the growing commercialism of the richer countries
came the increased consumption of natural resources. Water was required to meet the needs of
increased food production and urban life.
Energy consumption, especially fossil fuels, was necessary to fuel the
commercial expansion, increased significantly in the richer countries.
This increased use of limited resources brought about
problems of shortage, pollution and waste disposal. The greatest problem, global climate change,
was brought about by the increased emission of carbon-based gases.
Thus, the effect of globalization had a very positive effect
on the rich nations and little or negative effect on the poor nations. The result was a further widening of the gulf
between the two socioeconomic classes.
The result on the environment was catastrophic.
