Voiceover: Today we live in a global community
no longer limited by physical boundaries.
People across the world are connected by
the internet, by communications,
by the ease of travel.
People, money, information, ideas,
services, and goods are constantly moving
between countries.
This causes cultural and economic changes
in the countries involved.
This is what we call globalization.
As technology has advanced so have the
possibilities of international trade
and exchange.
The increase in international
trade has both created and been
supported by international
regulatory groups like The World Trade
Organization and transnational trade
agreements like The North American
Free Trade Agreement.
Anymore there isn't a single country that
is completely independent.
All are dependent, to some degree,
on international trade for their own prosperity.
Without international trade there'd be no
need for international regulatory groups,
and without the international
regulatory groups international
trade at the current massive scale
would be impractical.
The trade regulatory groups and agreements
regulate the flow of goods and services
between countries.
They reduce tariffs which are taxes or imports,
and make customs procedures easier.
This makes trading across national
borders much more feasible.
These international trade agreements
often benefit private industries the most.
Companies can produce their goods and services
across many different countries.
You could have a backpack that was
designed in the United States,
but the materials came from China
and it was put together in Mexico
before it was shipped back to the
United States to be sold.
These companies that extend beyond the
borders of one country are called
multinational or transnational corporations.
TNC's for short.
They intentionally surpass national
borders to take advantage of whatever
opportunities they can find in different countries
to manufacture, distribute, market,
and sell their products.
Some TNC's are pretty obvious,
like McDonald's or Coca-Cola,
and yet they still market themselves
as an American company.
Other TNC's can be surprising,
like General Electric which is
based in the States but has more than
half of its business and
employees working in other countries,
and Ford Motor Company,
the classic American car company,
headquartered in Michigan, that
manufactures its cars worldwide.
These and other transnational corporations
have significant sway in the global economy.
Some TNC's have a greater economic
weight than entire nations.
They influence the economy and politics
by donating money to specific political
campaigns or lobbyists,
and can even influence the global
trade laws of the international
regulatory groups.
Globalization has two major impacts on a country,
on the economy of the country
and on the culture.
Much of the economic globalization
results from the global market competition
for cheap labor.
TNC's will often locate their factories
in whichever country can provide
the cheapest labor in order to save on
expenses in the making of a product.
As a result, developing nations
will provide incentives like tax-free
zones or cheap labor so the TNC's
will set up shop in their country
in hopes of bringing jobs and industry
to beleaguered agricultural areas.
This promotes more rapid advances
in the developing nation because
of the ideas and innovations brought
over from the industrialized nations.
It also makes nations around the world
more interdependent which minimizes the
potential for conflict,
but in the end these incentives
often hurt the working population of the
developing nation.
The upper classes may benefit from
the business of the TNC,
but the people working in the factories
are exploited as their wages are cut
and often they are prohibited from unionizing.
It can even result in sweatshop conditions
for the workers with long hours,
substandard wages, and poor working conditions.
If the labor laws in one country
become too restricted to the TNC
they can just move their factory to a new country,
leaving widespread unemployment in their wake.
Setting up factories in these developing nations
may also hurt the core country where the
TNC is based because many potential
jobs are being sent abroad.
The same thing happens when companies
outsource their labor to other countries.
Outsourcing has really been enabled by
technological advances,
allowing immediate communication
across the world,
and the ease of transporting people,
goods, and information.
When companies find people in other countries
willing to work for a lower wage
they will often employ them
which is great for the company
because they save money,
and it's great for the people
in other countries because they
now have a job,
but it also means that the people in the
core country are losing jobs and
having difficulty finding new ones.
There seems to be a lot of negative
effects of globalization from
transnational corporations,
and yeah, free trade does promote
the self-interested agendas of
corporations and give them autonomy
and influence in politics, and allow
workers to be exploited,
but there are also positive effects,
like the better allocation of resources,
lower prices for products,
more employment worldwide,
and higher product output to name a few.
There is benefit seen by all countries
involved in free trade.
The changes a country experiences
from international trade are not
just economic.
Many of the cultural changes are just as
important and sometimes even more
obvious in the economic changes
the nation can experience.
As international trade becomes easier
and more widespread more than just
goods and services are exchanged.
Cultural practices and expressions
are also passed between nations,
spreading from group to group
which is called diffusion.
It's somewhat a scientific use of the word
where a substance will move from areas
of high concentration to areas
of low concentration.
Here, ideas and practices spread
from where they are well-known and
frequently apparent to places where
they are new and not often observed.
In the past exploration, military conquest,
missionary work, and tourism
provided the means for the trading of ideas,
but technology has exponentially
increased the speed of diffusion.
Now, mass media and the internet
allow the transfer of ideas almost instantaneously.
This is most commonly seen in the
transmission of scientific innovations
and the spreading of North American
culture which dominates the internet.
So, this is globalization,
the exchange of ideas, products, services
across countries that become integrated
into foreign cultures and affect foreign
economies, international trade,
transnational corporations, tourism,
missionary work, the internet, and more
all contribute to globalization
because people and corporations bring their own
beliefs, their traditions, and their money
with them when they interact with other countries.
These ideas and capital can then be
incorporated into, and thus change the
cultures and economies of these foreign
nations.