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What is Economic Globalization?

2016-12-01T17:21:01+00:00

The term 'Economic Globalization' is included in the Economics edition of the Financial Dictionary. It's available on mazon in Kindle or Paperback version. See more details here.

Economic globalization turns out to be an either hated or praised global phenomenon. It means that the economic picture and scenario for any given nation is dependent significantly upon the involvement of other often-time competing nations. A great number of countries who are friends supply resources to one another which the other countries simply lack.

Such resources can include imported technology, products, raw materials, services, and individual labor. Many critics have astutely observed that this process will eventually lead to closer integration and finally a one-world government, as has been gradually occurring within the European Union. This idea entails a centralized single government for all countries under one flag.

A popular engagement under the auspices of economic globalization is international trade. In this activity, countries exchange essential and luxury services and goods between one another. With countries that possess abundant natural resources, they rely on this system of trading to sell their unique resources so that they can improve their national economic situations.

International trade such as this has gone on for many centuries. The Silk Road which connects Asia and Europe in ancient trade demonstrates this. A modern day example of such international trade proves to be the toy industry. In this business, numerous toys sold in the United States and Europe carry the phrase “Made in China” upon their surface.

Economic globalization pertains to both economics and finances for countries, but it also impacts cultural identity and national politics as well. Tax treaties and trading policies are fashioned between various nations in order to protect either state from threats like terrorism or to control their trade. Multinationals can actually alter a nation’s appetite for foods. Corporations such as McDonald’s have managed to shift the eating preferences of consumers in Asian countries that believe rice should be the mainstay in their daily diets. European fashions from Paris, London, and Milan have managed to influence the styles and tastes of Asian and American consumers who import them to sell in their clothing shops.

It is easy to view economic globalization through either advantageous or disadvantageous lenses, depending on the perspective of the person judging it. The positive side effects are that it provides additional job opportunities and sometimes offers greater salaries. This often leads to faster and more economic growth and eventually an increasing standard of living. Such international cooperation has also fostered greater and longer periods of international peace between countries. It has further led to better cultural exchange through understanding and awareness of other cultures and countries. Technology has played an outsized role in this capacity.

Critics of economic globalization have much about which to vocalize their complaints as well. Many critics have successfully made the case that the disadvantages substantially outweigh the benefits. One negative issue is that it helps countries to burn through global natural resources on a larger and faster scale. This is a result of the higher demand for scarce raw materials which has grown with many developed and developing countries alike.

A second downside is that it enables human rights violations. Numerous nations are able to more easily exploit labor of other countries’ populations when they are developing countries. Still other critics from the developing world point to how economic globalization is basically a disguised means of richer countries colonizing those which are poorer and less powerful. They do this by seizing control of the overall economic picture of the poorer countries. Regardless of how critics or fans view this economic globalization, neither camp is able to deny the amount of impact which it continuously has on the global development of today and for the foreseeable future.

The term 'Economic Globalization' is included in the Economics edition of the Financial Dictionary. You can get your copy on mazon in Kindle or Paperback version. See more details here.