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Globalization can create opportunities for business expansion

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Globalization can create opportunities for business expansion

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Globalization is beneficial to both businesses and consumers. Because businesses are able to expand into other markets, they can use the money they make to buy their competition, or to buy the companies that make the parts they need for their product (vertical and horizontal integration), making the businesses more efficient. Globalization has also pushed many people to become entrepreneurs to take advantage of the opportunities in the market. For consumers, the increased competition that comes with globalization is good because it means lower prices. What is also good for consumers is that the perfect competition between businesses alike cause them to try and differentiate their products, increase advertising and lower prices so they can catch the consumer's attention. Although competition is a struggle for  businesses, it is ultimately beneficial for both groups.

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It's a small world, after all. This saying has never been more true, and if trends continue to develop the way they are, the world may continue to shrink.

In light of advanced technology, higher demands from markets and faster turnaround times, globalization has become a staple for world commerce.

In the U.S., the term globalization often has negative connotations. For many, it represents a threat to their jobs, livelihood and way of life.

Though many Americans think of it as a dirty word, "globalization," actually has been a catalyst for positive change as well.

Related:
K-State promotes globalization by offering Swahili courses

Here are four ways that globalization has had a positive impact on the world economy:
1. More efficient markets
Efficient markets should be what every economy strives for. Essentially, the sign of an efficient market is where there is an equilibrium between what buyers are willing to pay for a good or service and what sellers are willing to sell for a good or service.

If you can improve the way you produce a good or service by doing things such as outsourcing certain processes or buying from an overseas supplier that offers discounts, you can then afford to lower your selling price which results in increased demand and affordability.

Even if businesses don't lower prices, they can make additional profits and then reallocate that excess profit into doing things like increasing wages, taking on more investments or even creating more expansion projects.

Related:
3 negative impacts of globalization on the United States
2. Increased competition
Anytime that you have multiple producers competing for a hold of the economy, that's a good sign for consumers, as the quality of goods and services often goes up as a result.

When businesses started to venture across international borders, what they often did was introduce a new standard into the global marketplace. Consumers then had more options to choose from.

With more competitors to fight over market share, each company has to constantly look to improve their goods or services or create more value for their customers.

This means better products and sometimes lower prices, which is always a good thing for buyers.

When your economy depends largely on another country's economy, it is hard to imagine either one of the countries attacking the other. In a weird sort of way, globalization helped heighten world security.

Although this may seem kind of twisted since there is so much violence that still goes on in the world, the fact remains that globalization has halted many conflicts that could have turned ugly if their country's financial health didn't depend on the other.

4. More wealth equality throughout the world

Although many Americans contend that their standard of living has gone down because of globalization, the flip side to this is that hundreds of thousands of people around the world now have jobs, have started their own businesses and can provide comfort for their families.

Living in the U.S., we take things like clean water, shelter and plentiful food for granted. Our standard of living is so high compared to many nations that when we can no longer buy frivolous luxuries, we claim that we are poor.

Globalization may have stopped you from buying another flat screen TV, but it also helped countless people in developing countries put food on their table for their families.

See? There is a silver lining to it all.

Andy Rao is a junior in finance and accounting. Please send comments to news@kstatecollegian.com.

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4 positive impacts of globalization on world economy

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It's a small world, after all. This saying has never been more true, and if trends continue to develop the way they are, the world may continue to shrink.In light of advanced technology, higher demands from markets and faster turnaround times, globalization has become a staple for world commerce.In

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Globalization increases uneven distribution of wealth 

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Globalization increases uneven distribution of wealth 

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A downside of globalization is that it has been proven to increase uneven wealth distribution. This is because, as studies have shown, some countries are benefiting from globalization more than others. Globalization is selective about which countries benefit from it and which are left behind, and it tends to favorite the more complex countries. For example, while globalization has led to much higher GDP in some countries, in China GDP only increased slightly. Interdependence between countries also adds to the uneven distribution of wealth because of some factors including stronger and weaker relations among countries, separating the wealthier and poorer places from each other. Overall, globalization has made the difference between the wealthy and the poor across the world larger.

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Closer integration of national economies, also known as economic globalization, had increased prosperity primarily in the world's most advanced nations, a survey released by Bertelsmann Foundation on Monday showed.

Measuring wealth gains among 42 nations since 1990, the study by the Germany-based foundation found that per-capita gross domestic product (GDP) within the top 20 industrialized nations rose by about 1,000 euros ($1380) on average per year. However, in the so-called newly-industrialized countries (NICs) - including China, India and Mexico - average wealth gains amounted to less than 100 euros per person between 1990 and 2011, the survey said.

Germany, alongside Finland, Denmark and Japan, benefitted the most from rising economic interdependencies, adding an average of 100 billion euros to its GDP per year. This translated into about 1,240 euros more annually per German, the study, which was conducted by Prognos Institute, showed.

The per-capita gross domestic product gap between Germany and fast-growing China, for example, had widened over the period, rising from 20,879 euros in 1990 to 25,630 euros in 2011.

"This makes clear that globalization tends to widen the gap between rich and poor," Bertelsmann Chief Executive Aart de Geus said in a statement.

Geus also noted that protectionism on the part of the newly-industrialized countries would be the wrong response to the development because isolationism would reduce the growth effects of globalization in those countries.

The Bertelsmann Foundation CEO, therefore, called on the world's advanced economies to further open up their markets to products from less developed countries, reduce agricultural subsidies and do more for education in newly-industrialized nations. Moreover, spending on infrastructure and production facilities there should be enhanced to ensure the transfer of modern technologies, he added.

Although per-capita gross domestic product is a gauge for measuring the health of a country's economy, it says little about people's individual incomes. In Germany, for example, real wages have fallen over the past decade.

uhe/se (dpa, AFP)

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Globalization widens wealth gap as advanced economies outpace developing world | DW | 24.03.2014

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Closer integration of national economies, also known as economic globalization, had increased prosperity primarily in the world's most advanced nations, a survey released by Bertelsmann Foundation on Monday showed. Measuring wealth gains among 42 nations since 1990, the study by the Germany-based foundation found that per-capita gross domestic product (GDP) within the top 20 industrialized nations rose by about 1,000 euros ($1380) on average per year.

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Globalization provides consumers with more options

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Globalization provides consumers with more options

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Globalization has many benefits that result from the increased amount of trade between countries. Globalization provides consumers with more options. This is because the increased number of producers increases competition and gives consumers more affordable choices to choose from. Countries have fewer shortages because of the reduced restrictions on imports. If one country has a shortage of a product, they can easily find another country to import it from. Globalization gets countries to focus on their comparative advantage because they can export what they are most efficient at producing and import another country's product that they have a comparative advantage in.

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While many have heard the term globalization during news reports or televised debates, it can be challenging to suss out all of the attendant pros and cons. As the Internet continues to shrink the world we live in, globalization becomes more and more important. For those who are unaware, globalization is the process of shifting the world we live in from a place of isolation to a place of integration. It signals a greater economic and political cooperation worldwide and an increased sharing of ideas. Thanks to technological advances, globalization has become a greater reality.

List of Pros of Globalization

1. Free Trade
Once upon a time, nations were not able to trade freely with one another, due to all of the barriers that stood in their way. Companies in varied nations across the world are now able to trade with another, thanks to reduction of restrictions on importing and exporting.

2. The Consumer and Economy Benefit
Consumers are able to lower their costs and enjoy a much wider selection of products to choose from. Now that foreign companies can reach those who do not reside in their country, they are able to tap into markets that they were unable to reach before.

3. Competition Between Countries Drives Prices Down
The companies have greater access to more countries, which allows them to sell their goods and services to wholesale retailers all around the world.

4. Gives Other Nations Opportunity
A nation the opportunity to hone in on their strengths, while ignoring their weaknesses. A country that is rich in oil, but possesses a scarcity of suitable farm land is free to focus on exporting their plentiful oil supply. Because they do not have to worry about importation restrictions, they can easily purchase wholesale amounts of fresh foods from other countries.

5. Labor Can Move More Freely
Workers can move from country to country with relative ease and market their skills, goods and services to the highest worldwide bidder. Countries no longer have to suffer with gaps in their labor structures. A nation that is struggling to produce doctors can simply import them from another country. Shortages of labor are no longer an issue on a local level. Thanks to the increased ease of communication and the reliability of the Internet, a person can be trained to work at a job in a foreign country without actually being present.

List of Cons of Globalization

1. Smaller Countries Suffer the Most
While there are a variety of benefits, countries have struggled with certain globalization concepts. Certain nations benefit greatly from the current landscape, as others suffer. Smaller, less developed countries do not typically benefit from the level playing field that globalization provides.

2. Leaving Developing Countries Behind
Economists have argued that developing countries are at increased risk of being left behind. Globalization encourages free trade, which does not provide a developing nation with the protection that they need in order to grow.

3. Strain Among Job Markets
The free movement of labor also has its downsides. When workers can move freely from one nation to the next, countries that have a dearth of job opportunities often struggle. Skilled employees do not often stay in countries without a strong job market, which can cause a labor drain.

4. Inability to Recoup Investment
For countries that rely on public funding for their secondary educational system, this can be disastrous. Residents of the country utilize publicly funded colleges to bolster their skills for the job market, then take their talents to other countries. This leaves their home country with very little recourse to recoup their considerable investment.

5. Companies Seeking Personal Gain
Larger companies have learned how to leverage globalization for their own personal gain. Companies now have the ability to trade with countries that they are not based in. This allows them to exploit certain tax loopholes and hide money in places like Ireland and Hong Kong. When this happens, the countries that they are based in lose out on billions of tax dollars. The consumer is then squeezed by increased taxes on their goods, services and property. A nation typically has zero control over larger corporations registering in other countries to avoid taxation.

6. Negative Impact on Environment
The environment impact of globalization is considered to be negative by most experienced observers. The increased consumption of a wide variety of products leads to increased production which causes an uptick in pollution. Simply put, the environment is under added strain, which can have devastating long term effects on the planet's environmental stability.

7. Loss of Cultural Identity
Greater cultural hegemony is benefit, but countries are beginning to lose their identities due to immigration that is taking place on a progressively larger scale. As globalization becomes the new way of the world, more and more countries are at risk of losing their cultural identity.

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While many have heard the term globalization during news reports or televised debates, it can be challenging to suss out all of the attendant pros and cons. As the Internet continues to shrink the world we live in, globalization becomes more and more important.

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While globalization affects everyone, it has an especially strong and positive impact on developing countries. In developing countries globalization is very beneficial because it gives these countries access to funds they would not normally have, that can be used on things such as education, roads, and healthcare. These are services that help improve the quality of life for people who are living in the country. Globalization also gives underdeveloped countries access to markets they would not normally have access to, which allows them to build their businesses, create new products, and use new technology. Underdeveloped countries are able to become more developed due to globalization.

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The Effects of Economic Globalization on Developing Countries

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Financial and industrial globalization is increasing substantially and is creating new opportunities for both industrialized and developing countries. The largest impact has been on developing countries, who now are able to attract foreign investors and foreign capital. This has led to both positive and negative ...

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Globalization forms an interdependent system between countries. It encourages trading with foreign competitors and supplies people with more options for trading by making trade not just local but global. Jobs are open to a wider range of people because of globalization. People are able to travel to get a job in another country where the income is better. Globalization allows businesses to go worldwide, increasing their sales to its full potential. Countries striving to achieve similar goals form alliances such as the United Nations. These alliances are beneficial because the countries look out for each other and problem solve together.

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Although the term globalization has just been widely used within the last twenty years, the trend has been present centuries ago with the discoveries of explorers and the emergence of trade among nations. However, with the evolution of technology, it has gained popularity on a larger scale. Economists explain that globalization is a process that made it possible for nations to interconnect and generate world-wide links and activities with other countries.

This transformation, however, is said to have brought with it, advantages and disadvantages. And while it has brought benefits, critics are saying otherwise. Amid the contentions surrounding globalization, it is best to have a better knowledge of its effects on the aspects of economy, culture and politics:

List of Pros of Globalization

1. It promotes economic growth.
Proponents of globalization see this development as a way for countries from disparate parts of the world to come together and exchange goods and services, thus, opening doors to trade and commerce. Investors, particularly from developed countries, can now operate their businesses in developing countries and in return offer employment to hire employees from foreign countries. In establishing their businesses in other countries, they can take advantage of lower taxes and cheap services and labor. On the other hand, more jobs are generated in the countries they invest in, which mitigate the problem of unemployment. Moreover, with the continuing popularity of business process outsourcing, companies from different business sectors can now hire employees overseas without having to pay by the hour and at a much lower cost.

2. More countries can enjoy the benefits of free trade.
With globalization, there is also the emergence of free trade which allows member nations to purchase and offer their products without regulation from the government. Manufacturers can expand their market base and export their products to more countries. Consequently, increase in sales and profits. With a diversified market, producers can specialize in products they have plenty of resources for. Consumers, on the other hand, can access more goods at lower prices and at the same time have a plethora of choices when it comes to the products they need.

3. Skilled workers can now work overseas and earn more money and earn their countries revenues.
With more jobs available in other parts of the world for skilled workers, there is free movement of labor that allows migrant workers to get higher wages they will not usually earn in their own countries while their governments earn revenues. Host countries also benefit from this since foreign workers can fill the gaps in the local labor market such as health care and domestic services.

4. Countries merge to promote global politics.
Supporters of globalization see this as beneficial to countries which have the same goals in protecting their interests. For decades now, there is the convergence among different nations through international organizations such as the United Nations (UN), European Union (EU) and the Association of Southeast Asian Nations (ASEAN), to name a few. Nations which are members of these organizations work together and give each other support to solve global concerns and promote world peace. Also, smaller and poorer countries are assured help in times of calamities and conflicts with other countries.

5. It gives opportunities to countries to learn and experience other cultures.
Globalization and technology come hand in hand. With the evolution of the internet, language and cultural barriers are crossed. As countries become more open to other cultures, ideas and traditions, people are motivated to embrace biodiversity. And with nations ready to let in foreigners either for work or tourism, people can learn to respect and embrace other cultures more. Cultural globalization bridges the gap among nations and people.

List of Cons of Globalization

1. Globalization can lead to abuse of foreign employers to their workers and tax evasion.
Although this transformation allows businessmen to invest in other countries for lower operating costs, opponents of globalization sees this as a means for abusive foreign employers in order to take advantage of their employees. There are employers who are not offering healthy working environment but are demanding long hours of work. There is also the problem of child labor with many children from poor countries being forced to work in sweat shops. Another drawback raised is the practice of some investors opening companies offshore to avoid paying higher taxes which results to loss of revenue for the government.

2. It can result to labor drain and loss of job opportunities to local employees.
With opportunities to work overseas, skilled workers and professionals like doctors and nurses from developing nations are enticed to leave their own countries to seek for greener pastures. The end result, poor countries lose a large number of professionals who could have been of service to their own countries. Also, workers of the countries that employ foreign workers fear losing their jobs over foreign employees willing to accept lower wages. De-industrialization results since middle class employees are forced to accept a cut from their pay just so they can retain their jobs. At the end of the day, it appears that multinational companies and employers are the ones greatly benefiting from this.

3. Some countries are being used to empower rich countries.
Political globalization may have its pros but it also gives powerful countries to influence smaller countries to be allies and be used to increase their military powers and weaponry. If developed countries with military bases in other territories get into war with other nations, the smaller countries can be caught in between during conflicts and suffer death and destruction.

4. Globalization has adverse effects on the environment and leads to spread of diseases like HIV.
There are also discussions that with industrialization that comes with globalization, more wastes are produced and dumped in smaller countries with no regard for the environment. Toxic wastes are carried to some parts of the world and are harmful to the environment. Also, with more tourists coming from and going to countries where HIV and other communicable diseases are prevalent, health of more people are at risk.

Conclusion

Any development or change has its pros and cons. Globalization is not an exception. Indeed, it has opened doors to different countries and affected nations economically, culturally and politically. It is also something that cannot be stopped. The ideal action to take is to make use of its advantages and minimize its repercussions. Leaders should be on top of the situation and the people of the world could only hope it brings more good than bad.

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Although the term globalization has just been widely used within the last twenty years, the trend has been present centuries ago with the discoveries of explorers and the emergence of trade among nations. However, with the evolution of technology, it has gained popularity on a larger scale.

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Globalization has been the foundation of many trade agreements that have had mixed results for workers' incomes. Free trade agreements are meant to achieve economic growth but NAFTA has actually been shown to cause trade deficits since its creation. Even though increased imports means lower prices for consumers overall, they also can cause unemployment to rise, as the country supports fewer local businesses. Globalization can force people to downgrade their jobs to ones with lower incomes. Lower wages make it harder for people to support theirselves and family. The trade deficits that are caused by the trade agreements overall make workers wages suffer.

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Unfair trade deals have lowered the wages of U.S. workers by displacing jobs and weakening the bargaining position of low- and middle-wage workers. President Obama and his predecessors have frequently claimed that free trade agreements (FTAs) and other trade deals would lead to growing exports and domestic job creation. But data on trade following the North American Free Trade Agreement in 1994, China's entry into the World Trade Organization in 2001, and the U.S.-Korea Free Trade Agreement (KORUS) in 2007 show that these deals have done much more to stimulate imports than exports, leading to growing trade deficits.

The issue is simple: Although increased exports support U.S. jobs, increased imports cost U.S. jobs. Thus, it is trade balances-the net of exports and imports-that determine the number of jobs created or displaced by trade agreements. Rather than reducing our too-high trade deficit, past trade agreements have actually been followed by larger U.S. trade deficits.

Trade deals and globalization affect U.S. wages in two main ways:

Increased U.S. trade deficits push jobs out of better-paid tradeable sectors. Jobs displaced by growing trade deficits result in lost wages as workers who leave high-paying import-competing industries such as computer and electronic parts manufacturing take jobs in lower-paying nontradeable industries. Even when jobs in importing industries are replaced in part by jobs in exporting industries such as agriculture or food products, the result is wage losses from rising trade deficits.

Even if trade deficits do not rise, increased trade changes the composition of jobs, and the new patterns of employment lead to reduced demand for labor and downward pressure on wages. As the United States increases production (and increases exports) of capital-intensive goods and reduces production (and increases imports) of labor-intensive goods, this leads directly to a reduced demand for labor, even if exports and imports measured in dollars balance. Further, as imports displace workers from tradeable sectors (such as manufacturing), these laid-off workers need to accept lower wages to obtain work in other sectors (such as landscaping or construction), and this competition helps to lower the wages of similar workers already employed in these sectors. In short, while it is impossible to replace a waitress (a job in the nontradable restaurant sector) with imports, her wages are harmed by having to compete with apparel workers who have lost jobs due to increased trade flows. Standard trade models indicate that expanded trade has reduced the annual wages of a full-time American worker without a four-year college degree who earns the median wage by $1,800 per year. Given that there are roughly 100 million non-college-educated workers in the U.S. economy, the scale of wage losses suffered by this group likely translates into close to a full 1 percent of GDP-roughly $180 billion.

An example of direct wage losses from trade with China

The growth of U.S. exports to China between 2001 and 2011 supported 538,000 U.S. jobs; on average, jobs in the industries exporting to China paid $872.89 per week in 2009-2011 (the last years for which we have complete wage data).

The growth of U.S. imports from China between 2001 and 2011 displaced nearly 3.3 million (3,280,200) U.S. jobs; on average, jobs in these import-competing industries paid an average of $1,021.66 per week in 2009-2011.

Jobs in nontraded industries (industries that do not involve traded goods) paid an average weekly salary of $791.14 per week in 2009-2011.

Overall, the increase in the U.S. trade deficit with China between 2001 and 2011 eliminated more than 2.7 million U.S. jobs.

Total wage losses due to trade with China were $37.0 billion in 2011. This assumes that 538,000 of the 3.3 million workers who lost jobs in importing-competing jobs found work in the newly created exporting jobs paying $148 a week less or $7,736 less per year, and that the remaining 2.7 million workers displaced by growing U.S. imports from China found jobs in industries unaffected by trade paying $230 less per week or $11,987 less per year.

The displacement of manufacturing jobs by growing U.S. trade deficits with China has been particularly hard on minority workers: 958,800 were displaced, with wage-related losses in 2011 of $10,485 per worker and $10.1 billion overall.

The rapidly growing China trade deficit displaced nearly 1.1 million jobs in computer and electronic products between 2001 and 2011, well over a third of all the jobs displaced. Wages in the computer and electronic products sector are high, even higher than average manufacturing wages, and therefore higher than wages in nontraded industries. Nearly three-fourths (74.3 percent) of the workers in this industry sector earn wages in the top half of the income distribution.

For more EPI research and analysis on trade and globalization, visit go.epi.org/trade.

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Unfair trade deals lower the wages of US workers

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Unfair trade deals have lowered the wages of U.S. workers by displacing jobs and weakening the bargaining position of low- and middle-wage workers. President Obama and his predecessors have frequently claimed that free trade agreements (FTAs) and other trade deals would lead to growing exports and domestic job creation.

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While some people think globalization has contributed to poverty, a study by many economists for the European Commission  shows that globalization has decreased poverty for people around the world. Compared to 50 years ago, there are many fewer people living in deep poverty as a result of globalization. While the study does show that the income gap between the very poor and the very rich has widened, overall these economists say that the world is clearly better off with globalization.  It also recommends that rich countries do a better job of telling the world about the benefits of globalization, and that they go even further to reduce tariffs and subsidies to improve the lives of people in poor countries.

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Global Policy Forum is a policy watchdog that follows the work of the United Nations. We promote accountability and citizen participation in decisions on peace and security, social justice and international law.

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There is so much diversity in the world, but globalization is making all places seem the same, dispersing culture, and causing cultural adaptation. An example given is Starbucks. Starbucks is located all over the world and they are all the same. Chain stores ranging from food to clothing have expanded to locations worldwide because of globalization. These stores all offer the same look and experience no matter where in the world you are. Although diversity is prominent in the world, globalization is quickly diminishing the diversity among places by increasing the amount of common goods and experiences, and replacing local cultures with global ones.

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Stroll into your local Starbucks and you will find yourself part of a cultural experiment on a scale never seen before on this planet. In less than half a century, the coffee chain has grown from a single outlet in Seattle to nearly 20,000 shops in around 60 countries. Each year, its near identical stores serve cups of near identical coffee in near identical cups to hundreds of thousands of people. For the first time in history, your morning cappuccino is the same no matter whether you are sipping it in Tokyo, New York, Bangkok or Buenos Aires.

Of course, it is not just Starbucks. Select any global brand from Coca Cola to Facebook and the chances are you will see or feel their presence in most countries around the world. It is easy to see this homogenization in terms of loss of diversity, identity or the westernization of society. But, the rapid pace of change also raises the more interesting question of why - over our relatively short history - humans have had so many distinct cultures in the first place. And, if diversity is a part of our psychological make-up, how we will fare in a world that is increasingly bringing together people from different cultural backgrounds and traditions?

To get at this question, I argue that we need to understand what I call our unique 'capacity for culture'. This trait, which I outline in my book Wired for Culture, makes us stand alone amongst all other animals. Put simply, we can pick up where others have left off, not having to re-learn our cultural knowledge each generation, as good ideas build successively upon others that came before them, or are combined with other ideas giving rise to new inventions.

Take the axe as an example. At first we built simple objects like hand axes chipped or "flaked" from larger stones. But these would give way to more sophisticated axes, and when someone had the idea to combine a shaped club with one of these hand axes, the first "hafted axe" was born. Similarly when someone had the idea to stretch a vine between the ends of a bent stick the first bow was born and you can be sure the first arrow soon followed.
Life savers
In more recent history, this 'cumulative cultural adaptation' that our capacity for culture grants has been accelerated by the rise of archiving technology. Papyrus scrolls, books and the internet allow us to even more effectively share knowledge with successive generations, opening up an unbridgeable gap in the evolutionary potential between humans and all other animals.

Chimpanzees, for example, are renowned for their "tool use" and we think this is evidence of their intelligence. But you could go away for a million years and upon your return the chimpanzees would still be using the same sticks to 'fish' for termites and the same rocks to crack open nuts - their "cultures" do not cumulatively adapt. Rather than picking up where others have left off, they start over every generation. Just think if you had to re-discover how to make fire, tan leather, extract bronze or iron from earth, or build a smartphone from scratch. That is what it is like to be the other animals.

Not so for humans. Around 60,000 years ago, cumulative cultural adaptation was what propelled modern humans out of Africa in small tribal groups, by enabling us to acquire knowledge and produce technologies suitable to different environments. Eventually these tribes would occupy nearly every environment on Earth - from living on ice to surviving in deserts or steaming jungles, even becoming sea-going mariners as the Polynesians did. And amongst each one we see distinct sets of beliefs, customs, language and religion.

The importance of the tribe in our evolutionary history has meant that natural selection has favoured in us a suite of psychological dispositions for making our cultures work and for defending them against competitors. These traits include cooperation, seeking affiliations, a predilection to coordinating our activities, and tendencies to trade and exchange goods and services. Thus, we have taken cooperation and sociality beyond the good relations among family members that dominate the rest of the animal kingdom, to making cooperation work among wider groups of people.

In fact, we have evolved a set of dispositions that allow us to treat other members of our tribe or society as "honorary relatives", thereby unlocking a range of emotions that we would normally reserve for other family members. A good example of this so-called cultural nepotism is the visceral feeling you have when one of your nation's soldiers is lost in battle - just compare that feeling to how you react to the news of a similar loss of a soldier from another nation. We also see our cultural nepotism in the dispositions we have to hold doors for people, give up our seats on trains, or contribute to charities, and we might even risk our lives jumping into a river to save someone from drowning, or when we fight for our countries in a war.

Of course, this nepotism is not just a positive force. It is also a trait that can be exploited by propagandists and to produce Kamikaze-like or other suicidal behaviors. But the success of cooperation as a strategy has seen our species for at least the last 10,000 years on a long evolutionary trajectory towards living in larger and larger social groupings that bring together people from different tribal origins. The economies of scale that we realize even in a small grouping 'scale up' in larger groups, so much so that larger groups can often afford to have armies, to build defensive walls around their settlements. Large groups also benefit from the efficiencies that flow from a division of labour, and from access to a vast shared store of information, skills, technology and good luck.
'One world'
And so in a surprising turn, the very psychology that allows us to form and cooperate in small tribal groups, makes it possible for us to form into the larger social groupings of the modern world. Thus, early in our history most of us lived in small bands of maybe 50 to 200 people. At some point tribes formed that were essentially coalitions or bands of bands. Collections of tribes later formed into chiefdoms in which for the first time in our history a single ruler emerged.

Eventually several chiefdoms would come together in nascent city-states such as Catal-Huyuk in present day Turkey or Jericho in the Palestinian West-Bank, both around 10,000 years old. City-states gave way to nations states, and eventually to collections of states such as the United Kingdom or the United States, and even in our modern world to collections of nations such as seen in the European Union. At each step formerly competing entities discovered that cooperation could return better outcomes than endless cycles of betrayal and revenge.

This is not to say that cooperation is easy, or that it is never subject to reversals. Just look at the outpouring of cultural diversity that sprang up with the collapse of the Soviet Union. Despite being suppressed for decades, almost overnight Turkmenistan, Uzbekistan, Kazakhstan, Chechnya, Tajikistan, Moldova, Kyrgyzstan, and Dagestan reappeared, all differentiated by culture, ethnicity, and language.

So how will these two competing tendencies that comprise our evolved tribal psychology - one an ancient disposition to produce lots of different cultures, the other an ability to extend honorary relative status to others even in large groupings - play out in our modern, interconnected and globalised world? There is in principle no reason to rule out a "one world" culture, and in some respects, as Starbucks vividly illustrates, we are already well on the way.

Thus, it seems our tribal psychology can extend to groups of seemingly nearly any size. In large countries such as the United Kingdom, Japan, the United States, Brazil, India and China hundreds of millions and even over a billion people can all be united around a single tribal identity as British or Japanese, American, Indian or Chinese and they will have a tendency to direct their cultural nepotism towards these other members of their now highly extended tribe. If you take this behaviour for granted, just imagine 100,000 dogs or hyenas packed into a sporting arena - not a pretty sight.
'Bumpy road'
But two factors looming on the horizon are likely to slow the rate at which cultural unification will happen. One is resources, the other is demography. Cooperation has worked throughout history because large collections of people have been able to use resources more effectively and provide greater prosperity and protection than smaller groups. But that could change as resources become scarce.

This must be one of the most pressing social questions we can ask because if people begin to think they have reached what we might call 'peak standard of living' then they will naturally become more self-interested as the returns from cooperation begin to leak away. After all, why cooperate when there are no spoils to divide?

Related to this, the dominant demographic trend of the next century will be the movement of people from poorer to richer regions of the world. Diverse people will be brought together who have little common cultural identity of the sort that historically has prompted our cultural nepotism, and this will happen at rates that exceed those at which they can be culturally integrated.

At first, I believe, these factors will cause people to pull back from whatever level of cultural 'scaling' they have achieved to the previous level. An example is the nations of the European Union squabbling over national versus EU rights and privileges. A more troubling example might be the rise of nationalist groups and political parties, such as Marine le Pen's Front National in France, or similar far right groups in Britain and several European nations.

Then, if the success of modern societies up to this point is anything to go by, new and ever more heterogeneous and resource-scarce societies will increasingly depend upon clear enforcement of cultural or democratically derived rules to maintain stability, and will creak under the strain of smaller social groupings seeking to disengage further from the whole.

One early harbinger of a sense of decline in the sense of 'social relatedness' might be the increasing tendencies of people to avoid risk, to expect safety, to be vigilant about fairness, to require and to be granted "rights." These might all be symptoms of a greater sense of self-interest, brought about perhaps by declines in the average amount of "togetherness" we feel. When this happens, we naturally turn inwards, effectively reverting to our earlier evolutionary instincts, to a time when we relied on kin selection or cooperation among families for our needs to be met.

Against this backdrop the seemingly unstoppable and ever accelerating cultural homogenization around the world brought about by travel, the internet and social networking, although often decried, is probably a good thing even if it means the loss of cultural diversity: it increases our sense of togetherness via the sense of a shared culture. In fact, breaking down of cultural barriers - unfashionable as this can sound - is probably one of the few things that societies can do to increase harmony among ever more heterogeneous peoples.

So, to my mind, there is little doubt that the next century is going to be a time of great uncertainty and upheaval as resources, money and space become ever more scarce. It is going to be a bumpy road with many setbacks and conflicts. But if there was ever a species that could tackle these challenges it is our own. It might be surprising, but our genes, in the form of our capacity for culture, have created in us a machine capable of greater cooperation, inventiveness and common good than any other on Earth. And of course it means you can always find a cappuccino just the way you like it no matter where we wake up.
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Does globalization mean we will become one culture?

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Stroll into your local Starbucks and you will find yourself part of a cultural experiment on a scale never seen before on this planet. In less than half a century, the coffee chain has grown from a single outlet in Seattle to nearly 20,000 shops in around 60 countries.

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Globalization leads to businesses being shut down

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Globalization leads to businesses being shut down

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Inferior businesses shut down in the midst of globalization because they are no longer able to compete with the increased foreign competition that is often offering better quality products that have lower more affordable prices. Workers' incomes are dramatically decreased so they are able to spend less, hurting the economy overall. When businesses shut down, it often forces the former employees to take on multiple jobs that are not desirable. When businesses are shut down the unemployment rate rises and the incomes for some workers fall. The competition that comes with globalization results in businesses being demolished and job scarcity.

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GALESBURG, Ill. - Even in this city of abandoned factories, it is possible to see some of the benefits the United States reaps from increased foreign trade: At the rail yard, where boxcars of bargain-price Asian goods are routed to American consumers; at the nearby slaughterhouse, where pigs are packaged for the global market; and at Knox College, where almost 10 percent of the students now come from foreign countries.

It is also hard to miss the enduring costs. In 2004, Maytag shut down the refrigerator factory that for decades was Galesburg's largest employer and moved much of the work to Mexico. Barack Obama, then running to represent Illinois in the Senate, described the workers as victims of globalization in his famous speech that year at the Democratic National Convention.

A decade later, many of those workers are still struggling. The city's population is in decline, and the median household income fell 27 percent between 1999 and 2013, adjusting for inflation.

George Carney, who drove a forklift until the day the factory closed, and then found work as a bartender, is now receiving federal disability benefits. He says he is bitter that American policy makers smoothed Maytag's road to Mexico by passing the North American Free Trade Agreement in the early 1990s.

"I don't believe in laying someone off, in taking away someone's livelihood just so other people can make more money," Mr. Carney said as he nursed a beer in a windowless bar on the banks of the Mississippi River. "Why would I want to destroy that person? Why would I want to destroy lives?"

It is one of the basic principles of economics that trade is good and more trade is better. But as Mr. Obama presses Congress for the authority to negotiate a new generation of trade deals, the struggles of Galesburg illustrate why some economists have come to doubt the relevance of that orthodoxy. The costs of globalization have been greater and more enduring than they expected, and government efforts to mitigate the impact on American workers have often proved insufficient.

"I think what we've learned is that U.S. labor markets aren't as flexible and self-correcting as I think we had presumed," said Gordon Hanson, an economist at the University of California, San Diego. "The uneasiness I have about the way we've handled globalization is not so much globalization itself. It's that if you don't have the right safety net, you're going to impose an enormous amount of hardship."

There is also mounting evidence that the benefits of globalization have accrued disproportionately to upper-income households, while the costs have fallen heavily on the less affluent, contributing to the rise of economic inequality.

The Obama administration has presented the proposed agreements - one with nations that border the Pacific Ocean, the other with Europe - as, in part, a shield against globalization that would require other nations to move closer to American standards for environmental protection, worker rights and intellectual property.

But the administration and many outside economists say further trade, despite the negatives, is still clearly beneficial.

David Weinstein, a Columbia University economist, said the image of downtrodden Galesburg should be set alongside the prosperity of Silicon Valley, because the decline of manufacturing in the United States helped free resources to feed the high-tech boom.

"There was a sense that by losing the ability to produce computer chips, we were going to see the American electronics industry collapse, and it turns out that those cheap imported electronic components were just the thing that all of these companies needed," he said. "What these critiques miss systematically is that the losers know who they are, but the winners don't know who they are yet."
Drop in the Bucket
Trade deals are at the center of the political debate about globalization, but for all the sound and fury they generate, recent deals have played only a small role in the expansion of global trade. In 2013, on the 20th anniversary of Nafta, the Congressional Research Service reviewed the research and concluded it was not that big a deal.

"In reality, Nafta did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters," the report concluded.

Since Nafta, the United States has made trade agreements with 17 other countries, but the estimated impact of those deals, taken together, is even smaller - a few snowflakes added to a snowball already rolling downhill.

The seismic shift came after World War II, when the United States and other developed nations began to minimize tariffs and other barriers. Global trade grew as industrialization spread, particularly in China, and thanks to innovations including the standardized shipping container and the Internet.

Just as individuals benefit by working in one field and using their earnings to pay for other goods and services, economists contend that nations, too, prosper by specializing: exporting what they have and importing what they want.

A 2005 study by the Peterson Institute for International Economics, a research group in Washington that is a strong proponent of trade deals, estimated that embracing trade had added about 7.3 percent to America's economic output - or about $10,000 in annual income for every household in the United States.

But the benefits are not distributed evenly. Trade increases overall prosperity by eliminating less productive jobs. In theory, the workers find new jobs. In practice, studies by Mr. Hanson and other economists show that in cities like Galesburg, global competition is increasing unemployment and reducing wages.

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Tracy Warner, who worked at the factory for 15 years, is now a teacher's assistant. Credit Ryan Donnell for The New York Times

Josh Bivens, an economist at the liberal Economic Policy Institute, estimates that increased globalization, aided by a strong dollar that led to a persistent trade deficit, reduced the annual earnings of the roughly 70 percent of American workers without college degrees by about $1,800.

Joseph Stiglitz, a Columbia University economist and Nobel laureate, said the magnitude of these losses was large enough that increased trade may now be harming the American economy.

"The argument was always that the winners could compensate the losers," Mr. Stiglitz said. "But the winners never do. And that becomes particularly relevant when we have a society with as much inequality as we have today."
Few Job Options
Richard Lindstrom, whose family has owned an appliance store on Galesburg's Main Street for the last 89 years, said sales fell when Maytag left. But that was about the same time he started selling many imported high-definition televisions.

"We rode that crest, and it really offset the drop in appliance sales," he said.

Some Maytag workers were able to find better jobs. Mark Semande is now a foreman on the BNSF railroad, which has prospered greatly from increased trade. He made $14.50 an hour at the factory. Now he makes $28.93. With overtime, he estimates that his pay has tripled.

But many of the 1,600 Maytag workers were not as fortunate, according to Chad Broughton, a lecturer in public policy at the University of Chicago who chronicled Galesburg's struggles in his book, " Boom, Bust, Exodus."

Tracy Warner, who worked at the factory for 15 years, has not come close to matching her former salary of about $37,000 a year. She works as a teacher's assistant by day and a janitor by night and makes about $21,000.

Mr. Semande - whose father also worked at the factory - said he expected that his two daughters, ages 13 and 15, would move away when they grow up. "Maybe they could find jobs and live in the community," he said, "but not if they want to do as well as us."

Trade also tends to reduce prices, and there is evidence that lower-income households may benefit disproportionately, because they spend a larger share of income than wealthier households on the goods with the largest price declines. This Walmart effect may partly offset the distribution of income gains.

A study published last year estimated that international trade had lifted the purchasing power of lower-income American households, at the 10th percentile of the income distribution, about 62 percent. For wealthy households, at the 90th percentile of the income distribution, the power increase was 3 percent.

Downtown, Lindstrom's Appliances displays an early refrigerator. Credit Ryan Donnell for The New York Times

The variety of imports has also roughly tripled since the 1970s, according to a 2006 study that Mr. Weinstein, the Columbia economist, helped write. "We benefit from the fact that it's no longer just a choice between Maxwell House and Folger's," he said.

Walmart opened a supercenter in Galesburg in 2007, but Mr. Broughton said the arrival of the store could hardly offset the loss of the factory.

"The decline in the quality of life for working-class families has not been nearly matched by the low, low prices," he said. "Maybe those diffuse benefits have benefited America more generally. But it's not the case in Galesburg."
Lying Idle
President Obama returned to Galesburg in 2013 to deliver an economic policy speech at Knox College. "Let's tell the world that America is open for business," he said. "I know there's an old site right here in Galesburg, over on Monmouth Boulevard - let's put some folks to work."

But most of the old factory has been demolished. The last trace of its former life is a "Maytag Drive" street sign. The last refrigerators to roll off the line sit in a makeshift museum at the back of a downtown antiques mall.

Michael Patrick, who started working at the factory in 1959 and became a senior union official representing workers throughout the region, said job losses were nothing new. Companies went out of business, mechanized, moved to new cities. He recalled that in the 1970s, the workers who made the shells of refrigerators were replaced by a new machine the size of a football field.

The difference in recent decades, he said, is the absence of new companies.

But Mr. Patrick is not sentimental about what he views as the end of manufacturing in Galesburg. He said he focused on getting as much funding as possible to help his members train for new careers. He went to work after high school, he said, partly because there was no junior college in Galesburg. Now there is.

"Manufacturing was for people like me," Mr. Patrick, who is now 73, said.

When Ms. Warner, 49, learned that the plant would close, she finished an associate's degree at the local community college, then won a share of that training money to pursue a degree in communications at Western Illinois University.

But two years of tuition was not enough to reconstruct her life.

She is proud of the degree, but it has not helped her find a job. She lacks professional experience, and jobs in Galesburg are scarce. She has a teenage son and she does not want to move.

"I just needed a little more help," she said. "I didn't ask for my job to be taken out of the country."

A version of this article appears in print on , on Page A1 of the New York edition with the headline: Town's Decline Illustrates Peril of Trade Deals. Order Reprints | Today's Paper | Subscribe

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Perils of Globalization When Factories Close and Towns Struggle

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GALESBURG, Ill. - Even in this city of abandoned factories, it is possible to see some of the benefits the United States reaps from increased foreign trade: At the rail yard, where boxcars of bargain-price Asian goods are routed to American consumers; at the nearby slaughterhouse, where pigs are packaged for the global market; and at Knox College, where almost 10 percent of the students now come from foreign countries.

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Globalization is polluting our environment

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Globalization is polluting our environment

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While there have been many benefits of globalization, globalization has had an extremely negative impact on pollution. This is mainly because the increased trade that comes with globalization means more goods are produced, and the increased production of those goods causes increased pollution.  With increased production comes increased travel, and the more traveling that's done, the more gas and fumes are put into the air and soil.  The chemically modified soil is genetically mutating our plants. The water is also being contaminated with increased industrial garbage and waste such as oil spills, and ocean pollution is killing sea creatures. Globalization increases the amount of plastic used because we use plastic for shipping, and globalization means more shipping. Plastic is horrible for our environment because it can kill sea creatures and the material doesn't break down.

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Globalization has had far-reaching effects on our lifestyle. It has led to faster access to technology, improved communication, and innovation. Apart from playing an important role in bringing people of different cultures together, it has ushered a new era in the economic prosperity and has opened up vast channels of development. However, globalization has also created some areas of concern, and prominent among these is the impact that it has had on the environment.

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Facts About Globalization and its Alarming Impact on the Environment

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Globalization has helped in the immense growth in international trade and finance. It has made countries to work more closely with each other and has led to several innovations in science and technology. However, it has contributed to environmental degradation as well.

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These sources argue that globalization has made the world worse

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These sources argue that globalization has made the world better.