Globalization I - The Upside: Crash Course World History #41

Globalization

Key Concepts: Globalization, economic interdependence, multinational corporations, free trade, government subsidies, emerging markets, International Monetary Fund (IMF), global capitalism, remittances, cultural blending, Americanization, Green Revolution.

Economic Globalization and Trade

Globalization is a cultural phenomenon, but this discussion focuses on trade. The world experiences widespread global economic interdependence, which isn't new, but the scale has increased dramatically due to:

1. Multinational corporations: They have global reach and increasing power.
2. Cheap and safe travel and shipping: Reduced travel times and costs facilitate trade. Example: Atlantic crossing went from two months in 1800 to five hours by plane or less than a week by ship today.
3. Decreased tariffs and regulations: Governments have reduced trade barriers, leading to "free trade."

The role of governments is crucial. Example: U.S. government subsidizes cotton production, making it cheaper than cotton from Brazil or India, even if not the best or most efficient. However, the U.S.'s share of cotton exports is decreasing as Brazil, India, and Africa's increase. Spinning and weaving often occur in lower-wage countries like Mexico, Guatemala, Vietnam, and China. The finished shirts are then sent to Europe or the U.S. for screen printing and sale. The printing and retail aspects are more expensive than shipping.

Contemporary global trade is largely anarchic and unregulated, influenced by economists who argue that government regulation diminishes prosperity. Some nations, particularly in Latin America, the Caribbean, and Africa, have been pressured into free trade by larger economies. In the past 30 years, emerging markets have lowered tariffs, eliminated regulations, and privatized state-run businesses, often to appease the IMF, which offers loans with "many strings attached." The net positive impact of these decreased regulations is debated.

Shifting Manufacturing and Consumption

Industrial Western powers initially produced most manufactured goods for international markets, but domestic consumption was also important. Since the 1960s, former non-industrialized regions have been manufacturing consumer goods, primarily for foreign markets. Examples: T-shirts made in China and the Dominican Republic, computers manufactured in China with parts from Taiwan, Japan, and South Korea. Brazil also has a growing technology sector, manufacturing iPads. While domestic markets exist, foreign markets are much larger.

Impact of Global Capitalism

Global capitalism has increased worldwide economic output. Moving manufacturing jobs to lower-wage countries allows more people to live better than before. Approximately 600 million people have emerged from poverty in the last 30 years (defined as living on less than $1.25 a day, according to the World Bank). While inexpensive goods may cause domestic economic and social dislocation in countries like the U.S., the jobs provide opportunities for a longer, healthier, and more secure life for workers in countries like Vietnam.

Migration and Cultural Blending

People are moving more than ever. 21% of people in Canada were born elsewhere, and 69% in Kuwait. Migration is easier due to:

1. Cheap air travel: Especially for infrequent trips.
2. Easy communication: Skype, mobile phones, and inexpensive calling cards.
3. Better economic opportunities: Often found in wealthier countries.

Remittances (money sent home by people working abroad) are a significant driver of economic growth in the developing world. Example: In Tajikistan, remittances are 35% of the country's GDP.

Globalization also means cultural blending. Migrants bring their literary, culinary, artistic, and musical traditions. Globalized culture is paradoxical: some see increasing Americanization (e.g., FRIENDS broadcast in over 100 countries, Diet Coke in Madagascar, NBA in China), leading to fewer languages and less cultural diversity. However, individuals have greater access to diverse cultural experiences (e.g., Bollywood movies, Swedish hip hop, Brazilian soap operas). Culinary cultural fusion is popular, more novels are translated, and football (soccer) has gained popularity in America.

Globalization's Impact on Quality of Life

A t-shirt purchased from dftba.com costs about three hours of minimum wage work in the U.S., including shipping. The cotton has traveled further than Magellan's circumnavigation. A similar garment would have cost ten times as much work centuries ago.

These improvements are accompanied by radical change. The human population has exploded. In 1800, there were one billion people. Life expectancy has more than doubled in two centuries due to improved healthcare for women and infants, antibiotics, and the Green Revolution (increased use of chemical fertilizers leading to higher crop yields). These gains are not evenly distributed, but most viewers have survived childbirth and are confident their children will as well, a new feeling for humans.

Conclusion

We study history to understand these changes and remember what we've gained and lost. The relentless ambition of humans has led to a world where the entire Library of Alexandria and all of Mozart's compositions fit on an iPhone. This can make us feel big and powerful, but also dangerous.