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Globalization
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Globalization is the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, allowing them to become interconnected with different markets. At its simplest, globalization refers to the trend for markets to become world wide in scope.
What are the causes of increasing globalization? One of the primary facilitators of the global marketplace is the technological advance of the telecommunications industry. In the days of Adam Smith the opportunity to closely coordinate the activities of several foreign operations simply did not exist. Today, communication between most parts of the world is instantaneous. A manager in Bonn can telephone a manager in Rio de Janeiro to discuss the latest news regarding the orange crop. If the Brazilian manager wants to send some contracts to the German manager, it can be done by fax; if the data demands are larger, the information can be transferred via the Internet.
Another facilitator is the technological advance of the transportation industry. Between 1500 and 1840 the best average speed of horse-drawn coaches and sailing ships was about ten miles per hour. Between 1850 and 1930, steam became a dominant technology, with trains averaging sixty-five miles per hour and ships increasing their speed to thirty-six miles per hour. In the 1950s, propeller aircraft achieved speeds of three hundred to four hundred miles per hour. These speeds later increased to over six hundred miles per hour with the advent of the jet-engine technology. These advances have greatly increased the potential for flows of goods and individuals across national borders.
In addition to advances in transportation and communication, some scholars, speak of the convergence of consumer preferences and tastes. The tastes of teenagers, for example, around the world may be as much formed by Hollywood movies and MTV as they are by cultural heritage. This reality encourages a global-market approach to business as companies attempt to reach the largest number of consumers at the lowest price possible.
Another factor leading to a more globalized marketplace is the historical decrease in tariff and non-tariff barriers. Closely related to the liberalization of trade, technological advantages, and the convergence of consumer preferences are a set of competitive factors centered around the ideas of economies of scale (larger production volumes generating lower per-unit production costs) and location advantages.
Globalization plays an important role in fostering economic relations among nations across the world as it ensures easier movement of goods and services between countries and leads to free trade between countries along with a faster flow of information across geographical boundaries. It leads to reduction in cultural barriers which has proved to be conductive for economic co-operations among nations. Globalization has provided the movement of capital between countries and given a rise to multi-national corporations that undertake economic activity across geographical borders. Besides, it has helped to address environmental issues which are strategic to international economic relations.
However, globalization has a lot of critics. The opponents of globalization include people and organizations with very diverse concerns, cultures, and goals. They tend to agree that the benefits claimed for globalization are illusory, or accrue only to elites. For them it is a threatening word because it prompts visions of large multinationals dominating the world in pursuit of ever-higher profits. The critics of globalization believe that the competition from low-wage countries results in the “race to the bottom” as countries reduce wages, safety laws, taxes, welfare benefits and environmental control in order to become more attractive to foreign investments. Besides, the competition from low-wage countries leads to fewer jobs and the reduction of payments in richer countries. Moreover the critics of globalization fear that it threatens national cultures and their cultural identity.
Vocabulary Focus
Ex. 1. Complete the table by inserting the missing forms if possible.
| Noun | Verb | Adjective/Participle |
| facilitate | ||
| convergence | ||
| accrue | ||
| diverse | ||
| liberalize | ||
| environmental | ||
| dominant | ||
| advance |
Ex. 2. Choose the words with opposite meaning from two columns and arrange them in pairs.
| A | B |
| 11) opponent (n) 12) facilitate(v) 13) progress (n) 14) profit (n) 15) low-wage (a) 16) reduction(n) 17) domestic (a) 8) dominate (v) | k) loss (n) l) submit (v) m) high-wage (a) n) foreign(a) o) setback/regress (n) p) delay (v) q) increase (n) r) proponent/supporter (n) |
Ex. 3. Match the Russian word combinations with their English equivalents:
| A | B |
| 1).масштабы, границы 2). плавающий валютный курс 3). погоня за прибылью 4). правила техники безопасности 5). сближение интересов 6). разделение труда 7).страны с низкой заработной платой 8). экономия на масштабе 9). национальная самобытность 10). социальные пособия 11). передовая технология | a)scope b)safety laws c)floating exchange rates d) economy of scale e) welfare benefits f) division of labor g) low-wage countries h) cultural identitу i) pursuit of profits j) convergence of interests k) advanced technology |
Ex. 4. Insert the necessary prepositions.
1. At its simplest, globalization refers … the trend … markets to become world wide … scope.
2. As the result of globalization many businesses trade … the world, where is … the past they may have focused …one country, or possibly single continent.
3. Floating exchange rates have led … the removal … controls … the international movement … capital.
4. Any activity that can be conducted … a screen or … the telephone, from writing software to selling airline tickets can be carried out anywhere in the world, linked to head office by satellite and computer.
5. Even medical advice or education can now be sold … a distance of the telecoms networks.
Ex. 5. There is a logical connection among three of the four words (or word combinations) in each of the following groups. Which is irrelevant here and why?
1. Globalization, integration, floating exchange rates, social benefits.
2. Labor-intensive jobs, low-wage income, prosperity, environmental degradation.
3. To offer the great returns, to preserve cultural identity, international movement of capital.
4. Low-wage industries, labor-intensive jobs, race to the bottom, unprecedented prosperity.
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