Globalization

Globalization is the increasing interconnectedness of people, places, and cultures throughout the world today. The effects of this homogenizing process that we call globalization can be seen in all aspects of life. From McDonalds being in almost every country, to the majority of North American clothes being made in periphery countries, to the technological ability that allows us to instantly communicate with people anywhere in the world, the effects are everywhere. Economically today, globalization has had both positive and negative effects around the world, with many similarities to colonization. Globalization has also led to increased poverty amongst the global periphery, and a specific group of winners and losers within this process of globalization.

The start of globalization as we know it today came about in the 1980’s, when Nestle decided to push its baby formula product in the global periphery. This led to improper nutrition for babies, as it was expensive and had to be watered down with un-sterile water, causing many deaths. Eventually Nestle was boycotted, because it cared only about making profits, and not the effects that it had upon the global periphery. It was now too late though, and the birth of globalization, headed by the trans-national corporations (TNC’s) was in full swing. After the 1970’s, when our world become more interdependent, the 1980’s allowed for more intensification, and the driving factors of technology, international trade, and finance were facilitating globalization. The way in which globalization now operated economically was for the core countries to go into the periphery and exploit these countries for their cheap labor, abundance of primary goods, and lack of regulations. The TNC’s would now bring their western influences into the rest of the world, sending back cheap goods, while putting the periphery into deep patterns of poverty and debt.

One of the major reasons for these strong patterns of poverty and debt were the structural adjustment programs, or SAP’s. These were loans that were facilitated through the IMF, or International Monetary Fund, and given to periphery countries. Originally the SAP’s were to help colonized countries become independent and develop their own economy, but these loans led to huge debts instead. The conditionalities that these loans carried with them prevented these countries from progressing beyond anything except the export of their basic, primary goods. Also, certain quantities, prices, and other demands were required. This was because the western, core countries controlled the IMF and World Bank, meaning that they would want to profit from these SAP’s in some manner. So instead of helping these countries develop, they just end up exploiting them instead, leaving huge amounts of debt that these countries cannot pay back (HIPC: Highly Indebted Poor Country). A population of workers are trying to meet the demands of the loans, only to see their primary products prices fall lower and lower, due to synthetics, huge overstocks of these goods, and speculation of a low price elasticity. When this happens, not only can the countries themselves not pay their loans, but also their citizens are now making even less money than they started with. Only the western, core, exploiting countries gain an advantage.

Besides SAP’s, poor management of these periphery countries’ priorities and money has become a problem. Equity, as opposed to efficiency, has been emphasized throughout the countries that were first trying to become independent. Money was spread out through social programs such as schools hospitals, roads, jobs, and many other areas. While these areas are all essential parts of a growing country, there wasn’t enough money to spread around that thin, while still creating the enabling circumstances necessary to thrive. These enabling circumstances were necessary for any sort of success, focusing on privatization of business, minimalist government, de-regulation, and free trade. In turn this would create a devaluing of their currency, and the ability to export even more products. Instead, poverty has run rampant, leaving many countries in a vicious cycle of the poor becoming poorer, and the rich becoming richer. The $2 per day minimum for daily nutrition that a person needs is not being met in so many of the periphery countries now, leading to disease, death, and very little hope. This theme of exploitation has not only been a mark of globalization, but a major factor in the colonization of the periphery as well.

When western countries were colonizing countries in the periphery, the expansion of empires and imperialism of the west were thought to be the driving forces. Adam Smith realized, that in reality, it became the process of mercantilism, and exploitation. His 1776 book, Wealth of Nations, addressed these issues.

A man by the name of Cecil Rhodes led a ‘Cape to Cairo’