What is globalisation?

Globalisation is the rapid integration of trade and culture between the world's nations. With a more open market, goods - and by association, cash - can now travel across the globe much more freely. This greater global trade has been able to happen for these reasons:

• Governments have changed laws that in the past restricted economic trade;
• New technologies have enabled faster communication;
• Travel and transport costs have reduced dramatically.
• Foreign (western) companies have looked abroad for investment.

International bodies such as the World Trade Organisation and the European Union were partly created to help reduce the barriers to trade and investment and allow the global marketplace to blossom.

For many, globalisation is a good thing:

• Better standard of living: Increased international trade has made us wealthier and allowed us to lead more diverse lifestyles. Globalisation has provided greater choice on the high street, rising living standards and a growth in international travel;

• Bringing the world together: By promoting global growth, supporters believe it could even reduce poverty and increase equality worldwide. They say it has promoted information exchange, led to a greater understanding of other cultures and brought us together. All of which educates workers across the globe on how they should be treated and encourages people to stand up for their rights. Life expectancy in the developing world has risen from 46 to 64 in the last 40 years.

For others, it's not such a good thing:

Environmentalists, anti-poverty campaigners, trade unionists and anti-capitalist groups see the growth of global companies raising more problems than it solves. They believe the West's gain has been at the expense of developing countries whose share of the global income has dropped from 2.3% to 1.4% in the last decade. Others fear that by becoming a global community we are losing our cultures, traditions and differences that make individuals special and add colour to the world, in favour of a vacuous Hollywood-stamped world.

Transnational corporations (TNCs)

TNCs base their operations in more than one country so they can avoid laws and regulations that would otherwise tie them down. They manufacture goods where labour is cheapest, base their operations where taxes are low and sell the goods where the price is highest. They have been criticised for putting shareholders ahead of their workers, their customers and the environment. 500 TNCs now control two thirds of world trade, and 90% of these are based in the developed world placing profits back in the pockets of the richest. The world's three richest men have combined assets equal to the output of the world's 48 poorest countries and their 600m people.

The race to the bottom

Developing countries are desperate to attract foreign investment and they believe will create jobs and alleviate poverty. Global institutions like the International Monetary Fund (IMF) advise them to reduce barriers to trade and attract investors by keeping labour costs down. Countries then end up competing with each other to drive down wages and conditions, in what is known as the 'race to the bottom'. Winners of the race are unlikely to get their dream at the end of it. Employees often face harsh working conditions, long hours and a pittance of a wage.

While the developing world is struggling to attract trade, there is also a backlash against western workers as TNCs move their production plants abroad where wages will cost them so much less.

What can be done to lessen the negative effects of globalisation?

Forming trade unions will get the workers voices heard, and try to start to get companies to put people before profit. There is also a need for the world to adhere to a basic set of workers' rights and universal rules for trading and working in the global market. In 1998 the International Labour Organisation, a protector of the basic rights of people at work, set out its 'Fundamental Workers' Rights', and while they haven't solved the problem yet, they are trying hard to enforce them globally. 

Article produced by the Choose Action Alliance.

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