Globalization

Key Points

• The Digital Revolution is the change from mechanical and analog electronic technology to digital electronics with the adoption and proliferation of digital computers and information.
• The system that would evolve into the Internet was designed primarily for government use. However, interest in commercial use of the Internet grew quickly.
• The World Wide Web is an information space where documents and other web resources are identified by URIs, interlinked by hypertext links, and accessed via the Internet using a web browser and web-based applications.
• From 1997 to 2001, the first speculative investment bubble related to the Internet took place. “Dot-com” companies were propelled to exceedingly high valuations as investors rapidly stoked stock values.
• The term “Web 2.0” describes websites that emphasize user-generated content (including user-to-user interaction), usability, and interoperability.
• The Web 2.0 movement was itself greatly accelerated and transformed by the rapid growth in mobile devices.

Key Terms

• Digital Revolution: The change from mechanical and analog electronic technology to digital electronics with the adoption and proliferation of digital computers and information.
• World Wide Web: An information space where documents and other web resources are identified by URIs, interlinked by hypertext links, and accessed via the Internet using a web browser and web-based applications.

The change from mechanical and analog electronic technology to digital electronics with the adoption and proliferation of digital computers and information is known as the Digital Revolution. Implicitly, the term refers to the sweeping changes brought about by digital computing and communication technology during and after the latter half of the 20th century. Analogous to the Agricultural Revolution and Industrial Revolution, the Digital Revolution marked the beginning of the Information Age.

Rise of the Global Internet and the World Wide Web

Initially, as with its predecessor networks, the system that would evolve into the Internet was primarily for government use. However, interest in commercial use of the Internet quickly grew. Although commercial use was initially forbidden, the exact definition of commercial use was unclear and subjective. As a result, during the late 1980s, the first Internet service provider (ISP) companies were formed. The first commercial dial-up ISP in the United States was The World, which opened in 1989.

The World Wide Web (sometimes abbreviated “www” or “W3”) is an information space where documents and other web resources are identified by URIs, interlinked by hypertext links, and accessed via the Internet using a web browser and, more recently, web-based applications. It has become known simply as “the Web.” As of the 2010s, the World Wide Web is the primary tool billions use to interact on the Internet, and it has changed people’s lives immeasurably. Tim Berners-Lee is credited with inventing the World Wide Web in 1989 and developing in 1990 both the first web server and the first web browser, called WorldWideWeb (no spaces) and later renamed Nexus. Many others were soon developed, with Marc Andreessen’s 1993 Mosaic (later Netscape) often credited with sparking the internet boom of the 1990s.

A boost in web users was triggered in September 1993 by NCSA Mosaic, a graphic browser that eventually ran on several popular office and home computers. It was the first web browser aimed at bringing multimedia content to non-technical users, and included images and text on the same page, unlike previous browser designs. Andreessen was head of the company that released Netscape Navigator in 1994, resulted in one of the early browser wars with Microsoft Windows’ Internet Explorer (a competition Netscape Navigator eventually lost). When commercial use restrictions were lifted in 1995, online service America Online (AOL) offered users connection to the Internet via their own internal browser.

Web 1.0: 1990s to Early 2000s

In terms of providing context for this period, mobile cellular devices, which today provide near-universal access, were used for business but were not a routine household item. Modern social media did not exist, laptops were bulky, and most households did not have computers. Data rates were slow and most people lacked means to video or digitize video, so websites such as YouTube did not yet exist. Media storage was transitioning slowly from analog tape to digital optical discs (DVD) and from floppy disc to CD. Technologies that would enable and simplify web development, such as PHP, modern Javascript and Java, AJAX, HTML 4 (and its emphasis on CSS), and various software frameworks, awaited invention and widespread adoption.

From 1997 to 2001, the first speculative investment bubble related to the Internet took place, in which “dot-com” companies (referring to the “.com” top level domain used by businesses) were propelled to exceedingly high valuations as investors rapidly stoked stock values. This dot-com bubble was followed by a market crash; however, this only temporarily slowed growth.

The changes that would propel the Internet into its place as a social system took place during a relatively short period of about five years, starting from around 2004. They included:

• Accelerating adoption of and familiarity with the necessary hardware (such as computers).
• Accelerating storage technology and data access speeds. Hard drives emerged, eclipsed smaller, slower floppy discs, and grew from megabytes to gigabytes (and by around 2010, terabytes). Typical system RAM grew from hundreds of kilobytes to gigabytes. Ethernet, the enabling technology for TCP/IP, moved from common speeds of kilobits to tens of megabits per second to gigabits per second.
• High speed Internet and wider coverage of data connections at lower prices allowed for larger traffic rates, more reliable traffic, and traffic from more locations.
• The gradually accelerating perception of the ability of computers to create new means and approaches to communication, the emergence of social media and websites such as Twitter and Facebook, and global collaborations such as Wikipedia (which existed before but gained prominence as a result).

Web 2.0

The term “Web 2.0” describes websites that emphasize user-generated content (including user-to-user interaction), usability, and interoperability. It first appeared in a January 1999 article called “Fragmented Future” written by Darcy DiNucci, a consultant on electronic information design. The term resurfaced around 2002 to 2004 and gained prominence following the first Web 2.0 Conference. In their opening remarks, John Battelle and Tim O’Reilly outlined their definition of the “Web as Platform”, where software applications are built upon the Web as opposed to the desktop. The unique aspect of this migration, they argued, is that “customers are building your business for you.” They argued that the activities of users generating content (in the form of ideas, text, videos, or pictures) could be harnessed to create value.

Web 2.0 does not refer to an update to any technical specification, but rather to cumulative changes in the way webpages are made and used. Web 2.0 describes an approach in which sites focus substantially on user interaction and collaboration in a social media dialogue. Customers create content in a virtual community, in contrast to websites where people are limited to the passive viewing of content. Examples of Web 2.0 include social networking sites, blogs, wikis, folksonomies, video sharing sites, hosted services, Web applications, and mashups. This era saw several household names gain prominence through their community-oriented operation, including YouTube, Twitter, Facebook, Reddit, and Wikipedia.

The Mobile Revolution

The process of change generally described as “Web 2.0” was itself greatly accelerated and transformed by the increasing growth in mobile devices. This mobile revolution meant that computers in the form of smartphones became ubiquitous. People now bring devices everywhere and use them to communicate, shop, seek information, and take and instantly share photos and video. Location-based services and crowd-sourcing became common, with posts tagged by location and websites and services becoming location aware. Mobile-targeted websites (such as “m.website.com”) are increasingly designed especially for these new devices. Netbooks, ultrabooks, widespread 4G and Wi-Fi, and mobile chips capable or running at nearly the power of desktops on far less power enabled this stage of Internet development. The term “App” emerged (short for “Application program” or “Program”) as did the “App store”.

Key Points

• As transportation technology improved, travel time and costs decreased dramatically between the 18th and early 20th centuries.
• The developments in technology and transport infrastructure, such as jumbo jets, low-cost airlines, and more accessible airports, have made many types of tourism more affordable.
• As of 2014, there were an estimated 232 million international migrants in the world, and approximately half were estimated to be economically active. International movement of labor is often considered important to economic development.
• More students are seeking higher education in foreign countries and many international students now consider overseas study a stepping stone to permanent residency within a country.
• As more people have ties to networks of people and places across the globe rather than to a current geographic location, people are increasingly marrying across national boundaries.
• Because globalization has brought people into greater contact with foreign cultures, some have come to view one or more globalizing processes as detrimental to social well-being on a global or local scale, with xenophobia an issue in many modern societies.

Key Terms

• xenophobia: The fear of that perceived as foreign or strange.
• tourism: The act of traveling for pleasure, or the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours.
• immigration: The international movement of people into a destination country where they do not possess citizenship to settle or reside there, especially as permanent residents or naturalized citizens. People also immigrate to take up employment as migrant workers or temporarily as foreign workers.

An essential aspect of globalization is increased ease of travel. As transportation technology improved, travel time and costs decreased dramatically between the 18th and early 20th centuries. For example, travel across the Atlantic Ocean took up to five weeks in the 18th century, but around the time of the 20th century it took a mere eight days. Today, modern aviation has made long-distance transportation quick and affordable.

Tourism

Tourism is travel for pleasure. Developments in technology and transport infrastructure, such as jumbo jets, low-cost airlines, and more accessible airports, have made many types of tourism more affordable. International tourist arrivals surpassed the milestone of 1 billion for the first time in 2012.

A visa is a conditional authorization granted by a country to a foreigner allowing them to enter and temporarily remain within or leave that country. Some countries – such as those in the Schengen Area – have agreements with other countries allowing citizens to travel between them without visas. The World Tourism Organization announced that the number of tourists who required a visa before traveling was at its lowest level ever in 2015.

Immigration

Immigration is the international movement of people into a destination country of which they are not natives or where they do not possess citizenship to settle or reside there, especially as permanent residents or naturalized citizens, or to take up employment as a migrant worker or temporary foreign worker. According to the International Labor Organization, as of 2014, there were an estimated 232 million international migrants in the world (defined as persons outside their country of origin for 12 months or more), and approximately half were estimated to be employed or seeking employment. International movement of labor is often seen as important to economic development. For example, freedom of movement for workers in the European Union means that people can move freely between member states to live, work, study, or retire in another country.

Globalization

Globalization is associated with a dramatic rise in international education. More nd more students are seeking higher education in foreign countries and many international students now consider overseas study a stepping stone to permanent residency within a country. The contributions that foreign students make to host nation economies, both culturally and financially, has encouraged the implementation of further initiatives to facilitate the arrival and integration of overseas students, including substantial amendments to immigration and visa policies and procedures.

Transnational Marriage

Transnational marriage is a marriage between two people from different countries and a by-product of the movement and migration of people. A variety of special issues arise in marriages between people from different countries, including those related to citizenship and culture, which add complexity and challenges to these kinds of relationships. In an age of increasing globalization, where a growing number of people have ties to networks of people and places across the globe rather than to a current geographic location, people are increasingly marrying across national boundaries.

Reactions

Because globalization has brought people into greater contact with foreign peoples and cultures, some have come to view one or more globalizing processes as detrimental to social well-being on a global or local scale. Xenophobia is the fear of that perceived as foreign or strange. Xenophobia can manifest itself in the relations and perceptions of an in-group towards an out-group, including the fear of losing one’s identity, suspicion of another group’s activities, aggression, and a desire to eliminate its presence to secure a presumed purity.

Key Points

• While international trade has existed throughout history, its economic, social, and political importance has been on the rise in recent centuries.
• Industrialization, advanced technology, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system.
• The global supply chain consists of complex interconnected networks that allow companies to produce, handle, and distribute goods and services to the public worldwide.
• E-commerce is the act of buying or selling online and draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.
• Offshore outsourcing is the practice of hiring an external organization to perform business functions in a country other than the one where the products or services are actually developed or manufactured.

Key Terms

• International trade: The exchange of capital, goods, and services across international borders or territories.

International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has existed throughout history (for example, Uttarapatha, Silk Road, Amber Road, and salt roads), its economic, social, and political importance has been on the rise in recent centuries. Trading globally gives consumers and countries the opportunity to be exposed to new markets and products. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies, and water. Services are also traded: tourism, banking, consulting, and transportation. A product sold to the global market is an export, and a product bought from the global market is an import. Imports and exports are accounted for in a country’s current account in the balance of payments.

Industrialization, advanced technology, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is in principle not different from domestic trade, as the motivation and behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border. The main difference is that international trade is typically more costly than domestic trade, since a border imposes tariffs, time costs due to border delays, and costs associated with country differences such as language, the legal system, or culture.

Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across countries. Thus, international trade is mostly restricted to goods and services, and only to a lesser extent to capital, labor, or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor, the United States imports goods produced with Chinese labor.

Supply Chains

The global supply chain consists of complex interconnected networks that allow companies to produce, handle, and distribute goods and services to the public worldwide. A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer. Corporations manage supply chains to take advantage of cheaper costs of production. As the world has become more interconnected, resources, labor, and processes along the chain may occur in various locations, reaching an end point separate from all of these.

E-commerce is the act of buying or selling online. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction’s life cycle, although it may also use other technologies such as email. E-commerce has become an important tool for businesses of all sizes worldwide, not only to sell to customers, but also to engage with them.

Offshore Outsourcing

Offshore outsourcing is the practice of hiring an external organization to perform some business functions (“outsourcing”) in a country other than the one where the products or services are actually developed or manufactured (“offshore”). It can be contrasted with offshoring, in which a company moves itself entirely to another country or functions are performed in a foreign country by a foreign subsidiary. The widespread use and availability of the Internet has enabled individuals and small businesses to contract freelancers from all over the world to get projects done at a lower cost. Crowd-sourcing systems such as Mechanical Turk and CrowdFlower have added the element of scalability, allowing businesses to outsource information tasks across the Internet to thousands of workers. Opponents point out that the practice of sending work overseas by countries with higher wages reduces their own domestic employment and domestic investment. Many customer service jobs as well as jobs in the information technology sectors (data processing, computer programming, and technical support) in countries such as the United States and the United Kingdom have been or will potentially be affected.

There are different views on the impact of offshore outsourcing, encapsulated in the debates over protectionism versus free trade. Some see offshore outsourcing as a potential threat to the domestic job market in the developed world and ask for their home governments to enact protective measures or at least to scrutinize existing trade practices. Others, particularly the countries who receive work due to offshore outsourcing, see it as an opportunity. Free-trade advocates suggest economies as a whole will obtain a net benefit from labor offshoring, but it is unclear if those whose jobs are displaced receive a net benefit.

Key Points

• Cultural globalization refers to the transmission of ideas, meanings, and values around the world to extend and intensify social relations.
• One way in which shared norms have reshaped the global landscape around the turn of the 21st century is the liberalization of global society via the spread of democratic norms.
• With the ascendancy of the United States as sole global superpower in the aftermath of the Cold War, liberal democratic norms were spread throughout the world via U.S. ability to attract and co-opt other countries using soft power.
• Democratic peace theory posits that democracies are hesitant to engage in armed conflict with other identified democracies, thus making the liberalization of global society in the aftermath of the Cold War a positive trend towards worldwide pacifism.
• Capitalist peace theory posits that once states reach certain criterion for capitalist economic development, they are less likely to engage in war with each other and rarely enter into even low-level disputes.
• In Thomas L. Friedman’s 1999 book The Lexus and the Olive Tree, Friedman observed that no two countries with established McDonald’s franchises had fought a war against each other since those franchises were established in both countries. In a later interview, he admitted his theory was somewhat tongue-in-cheek.

Key Terms

• soft power: A concept developed by Joseph Nye of Harvard University to describe the ability to attract and co-opt using means of persuasion other than forceful coercion. The currency of soft power is culture, political values, and foreign policies.

Cultural globalization refers to the transmission of ideas, meanings, and values around the world to extend and intensify social relations. This process is marked by the common consumption of cultures that have been diffused by the Internet, popular culture media, and international travel. This has added to processes of commodity exchange and colonization, which have a longer history of carrying cultural meaning around the globe. The circulation of cultures enables individuals to partake in extended social relations that cross national and regional borders. The creation and expansion of such social relations is not merely observed on a material level. Cultural globalization involves the formation of shared norms and knowledge with which people associate their individual and collective cultural identities. It brings increasing interconnection among different populations and cultures.

Historical Background

One way in which shared norms have reshaped the global landscape around the turn of the 21st century is the liberalization of global society via the spread of democratic norms. This trend began in the 1980s as economic malaise and resentment of Soviet oppression contributed to the collapse of the Soviet Union, paving the way for democratization across the Iron Curtain. The most successful of the new democracies were those geographically and culturally closest to western Europe, many of which are now members or candidate members of the European Union. The liberal trend spread to some nations in Africa in the 1990s, most prominently in South Africa. Some recent examples of attempts at liberalization include the Indonesian Revolution of 1998, the Bulldozer Revolution in Yugoslavia, the Rose Revolution in Georgia, the Orange Revolution in Ukraine, the Cedar Revolution in Lebanon, the Tulip Revolution in Kyrgyzstan, and the Jasmine Revolution in Tunisia.

Number of nations scoring 8+ on Polity IV scale (1800-2003): Data source: The Polity IV project. (http://www.systemicpeace.org/polity/polity4.htm) The y axis is the number of nations scoring 8 or higher on the combined Polity score. Note that the Polity IV project only scores nations with greater than 500,000 total population.

Additionally, with the ascendancy of the United States of America as sole global superpower in the aftermath of the Cold War, liberal democratic norms were spread further throughout the world via U.S. ability to attract and co-opt other countries using soft power. Both Europe and the U.S. have promoted human rights and international law throughout the world based on the strength of their international reputations, influence, and culture. For example, the U.S. is one of the most popular destinations for international students, who in turn transmit ideas about and enthusiasm about liberal democracy back to their home countries. Additionally, American films, among other pieces of easily transmittable culture, have contributed to the Americanization of other cultures around the world. The information age has also led to the rise of soft power resources for non-state actors and advocacy groups. Through the use of global media, and to a greater extent the Internet, non-state actors have been able to increase their soft power and put pressure on governments that can ultimately affect policy outcomes.

Democratic and Capitalist Peace Theories

Democratic peace theory posits that democracies are hesitant to engage in armed conflict with other identified democracies, thus making the liberalization of global society in the aftermath of the Cold War a positive trend towards worldwide pacifism. The state of peace is not considered to be singularly associated with democratic states, although there is recognition that it is more easily sustained between democratic nations. Among proponents of the democratic peace theory, several factors are held as motivating peace between democratic states:

• Democratic leaders are forced to accept culpability for war losses to a voting public;
• Publicly accountable states are inclined to establish diplomatic institutions for resolving international tensions;
• Democracies are not inclined to view countries with adjacent policy and governing doctrine as hostile;
• Democracies tend to possess greater public wealth than other states, and therefore eschew war to preserve infrastructure and resources.

Those who dispute this theory often do so on grounds that it conflates correlation with causation, and that the academic definitions of democracy and war can be manipulated so as to manufacture an artificial trend.

Capitalist peace theory was developed in response to criticisms of democratic peace theory. The capitalist peace theory posits that once states reach certain criterion for capitalist economic development, they are less likely to engage in war with each other and rarely enter into even low-level disputes. There are five primary theories that have attempted to explain the capitalist peace.

• Trade interdependence: Capitalist countries that have deeply interconnected trade networks with one another are hesitant to engage in hostilities that might threaten the health of the existing trade relationship and thereby threaten benefits derived from that relationship.
• Economic norms theory: In contract-intensive societies, individuals have a loyalty towards the state that enforces the contracts between strangers. As a consequence, individuals in these societies expect that their states enforce contracts reliably and impartially, protect individual rights, and make efforts to enhance the general welfare. Moreover, with the assumption of bounded rationality, individuals routinely dependent on trusting strangers in contracts will develop the habits of trusting strangers and preferring universal rights, impartial law, and liberal democratic government. In contrast, individuals in contract-poor societies will develop the habits of abiding by the commands of group leaders and distrusting those from out-groups. As a result, theorists link causation of peace with liberal economies rather than liberal political systems, with the proliferation of democratic norms occurring only secondarily to the establishment of contract-intensive economies.

• Free capital markets/capital openness: This theory, originally introduced by Eric Gartzke, Quan Li, and Charles Boehmer, argues that nations with a high level of capital openness are able to avoid conflict with each other and maintain lasting peace. In particular, nations with freer capital markets are more dependent on international investors because those investors are likely to withdraw if the country is engaged in a war or interstate conflict. As a result, leaders of states give greater credibility to threats made by countries with higher levels of capital openness, causing the aforementioned countries to be more peaceful than others by avoiding the possibility of misrepresentation of information.
• Size of government: This explanation of capitalist peace relies on a definition of capitalism that assumes capitalist states will also have limited governments, and in turn, large private sectors. Given this definition, the idea is that smaller governments are more dependent than larger or socialist governments on raising taxes for fighting wars. This makes the commitments of nations with smaller governments more credible than those with larger ones, allowing for nations with smaller governments, and thus “capitalist” economies, to be better positioned for avoiding conflicts.
• Ruling others by force: This theory adduces that if men want to oppose war, they must oppose statism. So long as they hold the tribal notion that the individual is sacrificial fodder for the collective, that some men have the right to rule others by force, and that some (any) alleged “good” can justify it, there can be no peace within a nation and no peace among nations. Most definitions of capitalism are opposed to the strictures of statism and therefore, capitalist societies must tend towards peace.

Golden Arches Theory

In Thomas L. Friedman’s 1999 book The Lexus and the Olive Tree, Friedman observed that no two countries with established McDonald’s franchises had fought a war against each other since those franchises were established in both countries. He supported that observation as a theory by stating that when a country has reached an economic development where it has a middle class strong enough to support a McDonald’s network, it would become a “McDonald’s country” and will not be interested in fighting wars anymore. Shortly after the book was published, NATO bombed Yugoslavia. On the first day of the bombing, McDonald’s restaurants in Belgrade were demolished by angry protesters and were rebuilt only after the bombing ended. In the 2000 edition of the book, Friedman argued that this exception proved the rule because the war ended quickly as a result of the Serbian peoples’ desire to not lose their place in a global system “symbolized by McDonald’s” (Friedman 2000: 252–253).

Critics have pointed to two other conflicts fought before 2000 as counterexamples, depending on what one considers a war:

1. The 1989 United States invasion of Panama; and
2. The 1999 Indian-Pakistani war over Kashmir, known as the Kargil War. Both countries had (and continue to have) McDonald’s restaurants. Although the war was not fought in all possible theaters (such as Rajasthan and Punjab borders), both countries mobilized their military along common borders and both countries made threats involving their nuclear capabilities.

In a 2005 interview with The Guardian, Friedman said that he framed his theory “with tongue slightly in cheek.”