Globalization

About this topic

Globalization is the growing interconnection of the world's economies, cultures and people through trade, travel, communication and technology. It has deep roots in the Silk Road and the Columbian Exchange, but accelerated after World War II and especially since the 1990s thanks to container shipping, jet planes, the internet and falling trade barriers promoted by institutions such as the World Trade Organization, International Monetary Fund and World Bank.

Multinational corporations spread production across countries in global supply chains: a smartphone may be designed in California, with parts from several Asian countries and assembled in China. Comparative advantage, the idea that countries gain by specializing in what they produce relatively efficiently, explains the gains from trade. Cheap goods, jobs in developing nations and spreading ideas, music, food and movies are benefits.

Critics point to job losses in manufacturing in wealthy countries, exploitation of workers, widening inequality, environmental damage and loss of local cultures, while crises such as the 2008 financial meltdown and the COVID-19 pandemic showed how quickly shocks spread. Supporters note that extreme poverty has fallen sharply, especially in China and India. Example: a T-shirt sold in Europe may be grown in Asia, sewn elsewhere and shipped globally. Misconception: globalization is not simply Americanization or simply good or bad; its effects vary by place and policy.