What is globalisation?

24 June 2008

We hear a lot these days about globalisation. But what does it mean for workers around the world? Young Members Organiser, Tracy Edwards seeks to explain.

According to Wikipedia, globalisation can be described as “a process by which the people of the world are unified into a single society and functioning together. This process is a combination of economic, technological, sociocultural and political forces”.

The effects of globalisation

In terms of economics, the effects of globalisation can be measured in four different ways:

  • goods and services – exports as a proportion of national income per capita of population
  • labour/people – inward or outward migration flows and labour costs (ie the wages, terms and conditions of workers)
  • capital – inward or outward direct investment as a proportion of population
  • technology – international research and technological advances.

Under globalisation, financial institutions look to increase their profits using these four economic indicators.

Most governments have now deregulated their financial markets and privatised public services and public utilities such as gas, water and electricity, resulting in ultra free markets open to competition and relying on speculative markets rather than the real economy.

So can globalisation be a good thing?

It is mainly people in poor countries who grow and make things whilst people in rich countries buy them - so some would argue that they are working to lift themselves out of poverty and that we are doing them a service by consuming their goods.

Rich countries dominate the World Trade Organisation (WTO), which agrees the way countries trade – so they set the rules in which poorer countries have to adhere to.

Rich nations can place high taxes on imported goods – this limits poor countries ability to share in the world’s market.

The effects – judge for yourself

According to the organisation No Sweat which campaigns in the UK against sweatshops worldwide:

  • 1.3 billion people live on less than a dollar a day
  • Life expectancy in sub Sahara Africa is 46 years
  • Young women in Bangladesh are paid the equivalent of just 1.6 US cents for each $17.00 cap they sew for Harvard University.
  • The world’s 497 billionaires (in 2001) accumulated a combined wealth of $1.54 trillion. The combined income of the 582 million people living in the 43 least developed countries was $146 billion.

If you would like more information about the effects of globalisation and campaigns you can get involved in check out the No Sweat website or the Trade Justive Movement which is a broad coalition of organisations, including PCS, which together campaign for trade justice - not free trade – which benefits poor people and the environment)

Labour behind the label supports garment workers' efforts worldwide to improve their working conditions.


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