You are on page 1of 20

Spealdng of Economics

The Costs and


foreign debt

Benefits of The pa rt of a country's total debt


that is owed to foreign creditors .
Government, businesses, or individ­
uals can owe the debt. Creditors

Globalization
can be foreign banks, governments,
or financial institutions.

debt forgiveness
The cancellation of all or part of a
debt. Once forgiven, a debt does
not have to be repaid .
.• 16.1 Introduction
capital flow
Globalization is a complex process. At its heart, it The movement of money into and
out of a country through foreign
represents the growing integration of economies and
investment and other financial
societies around the world. For some of us, the most activities.
visible sign of globalization may be the availability of
products from many different nations in food stores economic development
and shopping malls. For others, it may be shuttered The process by which a country
factories, as work once done in the United States makes economic progress and raises
moves to other countries. As economist David Hum­ its standard of living. Development
includes improvements in agriculture
mels observes, our views of globalization are mixed.
and industry, the building of roads and
other economic infrastructure, and
The word globalization has been used to mean investments in human capital.
many different things. It may conjure up visions
offleets of container ships moving goods worth developed country
trillions ofdollars across all the world 5 oceans, A wealthy, industrialized country in
giant multinational firm s with operations in which the majority of people have
every time zone, brand names and advertise­ more than enough income to meet
their basic needs and maintain a high
ments known by consumers on six continents,
standard of living.
and telephone call centers in India providing
customer service to American consumers . . . developing country
To some, globalization also conveys broader A low- to medium-income country in
concerns and even fears, such as the erosion which most people have less access
of labor and environmental standards or the to goods and services than the aver­
loss of national sovereignty to international age person in a developed country.
institutions that are not accountable to citizens
least developed country
of any nation.
A country that suffers from severe
-David Hummels, Focus: Globalization, 2006 poverty and low standards of living.
Globalization is also controversial. To its support­
extreme poverty
ers, the benefits of globalization far outweigh any
A condition in which people are too
poor to meet basic survival needs,
Globalization is a hotly debated political
including food, shelter, and clothing.
and economic issue .

319
costs it might bring with it. They argue that the easy To clear the streets, Seattle police used tear gas and
movement of people, goods, ideas, and technology rubber bullets in what newspapers called the "Battle
around the world promotes economic growth and of Seattle."
reduces poverty. They also believe that globalization This chapter examines the debate between sup­
encourages global cooperation in efforts to solve porters and critics of globalization. It also considers
broad social and environmental problems. some of the costs and benefits of the globalization
Critics of globalization, in contrast, charge that process for both people and the environment.
its costs exceed its benefits. As evidence they point
to a deteriorating global environment and the per­
sistence of poverty in much of the world. Not only
• 16.2 Who Are the Main Players
has globalization failed to solve these problems, they
in the Globalization Debate?
argue, but may well be making them worse.
The debate over globalization made headlines in
At the Seattle protests, concerns about globalization
November 1999 when protesters gathered in Seattle,
focused on the World Trade Organization. However,
Washington, to disrupt a meeting of the World
the WTO is just one of many players in the globaliza­
Trade Organization. The antiglobalization demon­
tion debate. These players can be divided into four
strators blamed the WTO for contributing to a host
main groups: international organizations, nongovern­
of economic, social, and environmental problems,
mental organizations, multinational corporations,
from job losses in the United States to global warm­
and sovereign nation-states.
ing. As they marched through the streets, they
chanted, "Hey hey, ho ho, the WTO has got to go."
International Organizations
Some of the main targets of globalization critics are
international organizations like the WTO. Other
key players in this group are the United Nations, the
World Bank, and the International Monetary Fund.

World Trade Organization. As the body mainly re­


sponsible for drawing up and enforcing international
trade agreements, the WTO stands at the center of
the globalization debate. Its critics argue that the
WTO works to protect the interests of wealthy coun­
tries and corporations at the expense of poor coun­
tries. They also charge that WTO policies endanger
the environment and the rights of workers.
WTO officials see these charges as misguided.
"Trade is the ally of working people, not their en­
emy," declared WTO director-general Mike Moore
at the Seattle gathering in 1999. "As living standards
improve, so too does education, health, the environ­
ment and labor standards."

United Nations. Founded at the end of World War II


as a peacekeeping organization, the United Nations
has become a key player in the globalization process.
As part of its mission, the UN analyzes economic is­
The United Nations plays an important role in the globalization
debate. The UN examines key economic and political issues
sues and provides aid to poor countries. It also brokers
and seeks solutions to global problems. Here, UN delegates international agreements deSigned to protect the en­
meet to discuss human rights. vironment, defend human rights, and preserve cultural

320 Unit 6 Globalizatio n and the Global Economy


Despite global efforts to relieve
poverty in Africa, Africa remains the
world's poorest continent. A large
E foreign debt is part of the problem.
o
~
'"c: Yet, as this cartoon implies, even if
o
~m Africa were to break free of its debt,
U it would still be shackled with severe
'"
.','
problems .

~
~
u
'"aa
N

@ ~~~~~~~~~~~~~~~~~~~~~~

traditions. These activities put the United Nations arises when a government accumulates too much
squarely in the middle of the globalization debate. foreign debt. A country's foreign debt is the amount
of money it owes to lenders in other countries.
World Bank. Also founded as World War II drew to
When debt levels rise too high, a poor country may
a close, the World Bank has seen its mission change
have trouble servicing its debt. Debt service is the ser­
over time. Its initial goal was to help Europe recover
ies of payments of interest and principal a borrower
from the war. Later, its focus shifted to helping poor
agrees to pay a lender over the life of the loan. To make
countries develop their economies.
payments on time, a government may need to bor­
As part of this second effort, the World Bank has
row still more money. But as soon as signs of trouble
funded large projects aimed at improving the eco­
appear, lenders may demand higher interest on new
nomic infrastructure of poor countries. Examples
loans. Or they may stop loaning money to the govern­
include hydroelectric dams and highways. Critics
ment altogether. The result is a debt crisis.
charge that many of these projects have benefited
The IMF uses a two-pronged approach to end
wealthy business interests and corrupt governments
such a crisis. First, it acts as a kind of lender of last
far more than the poor.
resort. The IMF agrees to loan money to the trou­
Critics also point out that some projects, such as
bled government at a lower interest rate than other
a program to help settlers move into the Amazon
lenders are demanding. This enables the government
rainforest, have led to widespread environmental
to continue servicing its debt.
destruction. Others, such as dam projects in Asia,
Second, as a condition for such loans, the IMF
have hurt poor people by forcing them to relocate
requires the government to adopt austerity mea­
out of areas to be flooded. In response to such crit­
sures. Usually this means reducing the govern­
icism, the World Bank has shifted its focus to proj­
ment's budget deficit by cutting spending. Once
ects more directly aimed at eliminating poverty.
this is done, the government has less need to keep
International Monetary Fund. Founded at the same borrowing more and more money.
time as the World Bank, the International Monetary Critics charge that such measures harm poor coun­
Fund has seen its mission evolve as well. Its first task tries. When forced to cut spending, governments
was to reconstruct the world's battered international often eliminate programs that help the poor, such
banking system after World War II. Today the IMF as food subsidies. As a result, critics say, the costs
offers economic advice and assistance to countries of IMF policies fall most heavily on those least able
with financial problems. to bear them. The benefits, in contrast, flow to banks
The IMF is often called on to help countries and other lenders in wealthy countries whose loans
experiencing a financial crisis. Such a crisis typically are protected.

Chapter 16 The Costs and Benefits of Globalization 321


Critics also charge that IMF policies trap poor Nations Conference on Trade and Development
countries in a cycle of debt they can never repay. A (UNCTAD) reported th at 29 of the 100 largest eco­
better approach, they say, would be debt forgiveness, nomic entities in the world were companies, not
or the cancellation of debts owed to foreign lenders. countries. The economic output of Exxon/Mobil,
Eliminating foreign debts, they argue, would help for example, was about the same as that of Pakistan. -'
poor countries escape the debt cycle. General Electric ranked just above Kuwait, Roma­
Defenders of the IMF reply that no country is nia, and Morocco. Toyota's output of goods and
forced to accept an IMF loan with its austerity mea­ services was twice that of Guatemala.
sures. Moreover, canceling debts would only reward The economic power of these giant corporations
countries that have failed to control their budgets. It concerns critics of globalization. Critics fear that
would also eliminate any incentive for poorly managed multinationals might become a law unto themselves,
governments to make needed fiscal policy reforms. wielding power with little restraint from national
governments. Critics also worry that in their search
Nongovernmental Organizations for profits, multinationals will move their operations
Another set of players in the globalization debate to countries that are unable to protect their workers
consists of nongovernmental organizations. NGOs or the environment from abuse. The result, critics
are nonprofit organizations that operate outside of fear, will be a "race to the bottom" in terms of wages,
governments. The term NGO often refers to organi­ working conditions, or pollution.
zations that focus on helping lift people out of pov­ Supporters of globalization counter that multina­
erty around the world. Funding for NGOs typically tional corporations generate trade, investments, jobs,
comes from member contributions and grants from and other economic benefits in countries where those
private foundations. corporations do business. The multinationals also
Many of the NGOs in the globalization debate train workers in new technologies and business meth­
are concerned about the effects of global trade on ods, increasing the host country's human capital.
the environment. Among these are such groups as In the 1970s, for example, Daewoo, a South Korean
the Sierra Club, Greenpeace, and the World Wildlife multinational, decided to expand its garment-making
Fund. Other NGOs speak out on social issues asso­ business to Bangladesh. The company invited l30
ciated with globalization. Examples include Oxfam Bangladeshi workers to Korea to learn how to make
International, CARE, the Global Fund for Women, shirts. Over time, 115 of those workers left Daewoo
and Save the Children. and used what they had learned to set up their own
The Seattle protests brought together representa­ garment companies. Clothing soon became Bangla­
tives from hundreds of NGOs supported by students, desh's leading export. By 2006, its garment industry
farmers, and church groups. Members oflabor unions employed 3 million workers who produced $5 billion
were also there to voice their concerns about losing jobs worth of clothing for export each year.
to global trade. "I never got on with environmentalists,"
commented a laid-off steelworker from Michigan, Sovereign Nation-States
"until I realised we were all fighting for the same thing." The last major players in the globalization debate are
the world's sovereign nation-states. A nation-state
Multinational Corporations is an independent political body with full authority
Multinational corporations are both central players over its territory and inhabitants. The members of
in the globalization process and prime targets of the United Nations are all nation-states.
globalization critics. Multinationals are companies A nation-state, in theory, has the sovereign power
that have a home base in one country and operations to regulate trade and capital flows across its borders.
in other countries. These large companies promote Capital flows are movements of money and invest­
globalization by moving goods, capital, information, ments from one country to another. To seCure the
and people across borders to do business. benefits of global trade, however, many nation-states
Some multinationals have economic assets that have agreed to limit their use of trade barriers by
dwarf those of many nations. In 2002, the United signing free-trade agreements and joining the WTO.

322 Unit 6 Globalization and the Global Economy


A frequent complaint about the WTO is that its The Globalization Index
rulings on trade barriers restrict national sovereign­ As you would expect, some nation-states are more
ty. As one protester in Seattle put it, "The WTO can open to globalization than others. To see how nations
rule that a country's laws and regulations are barri­ rank in this area, Foreign Policy magazine has cre­
ers to free trade, regardless of the fact that those laws ated the Globalization Index. This index measures
were passed by the people or in the public interest." a country's global outlook in four broad areas: trade
This protester might have been referring to a de­ and investment, personal contacts , technological
cision made by the WTO a year earlier in a dispute connectivity, and political links. The 72 countries
over the use of synthetic hormones to stimulate the that were ranked in 2007 accounted for 97 percent
growth of cattle. The European Union (EU) had of the world's gross domestic product (GDP) and
banned imports of meat from hormone-treated 88 percent of the world's population.
cattle as a health risk. The United States appealed A country's ranking in the Globalization Index
the ban to the WTO, saying that it was an unfair indicates how much or how little it has opened itself
restraint on trade. The WTO found no health risk up to trade and contact with other countries. Perhaps
and ruled that the ban was an illegal trade barrier. not surprisingly, the highest-ranked countries, such
Regardless of how you feel about hormone-treated as the United States, Australia, and the nations of
cattle, what is important to note here is that the WTO's Europe, are among the world's wealthiest. Lower­
ruling could not and did not force the European ranked countries, such as India, Nigeria, and Peru,
Union to change its policy. Members of the WTO are marked by widespread poverty.
retain their full sovereign powers. However, the This contrast raises the question of cause and
ruling did give the United States the right to raise effect. Are the top-rated countries wealthy because
tariffs on European imports to make up for the cost they have embraced globalization? Or have they em­
of the EU ban to U.S. beef exporters. braced globalization as a means to grow wealthier?

Figure 16.2

Graphing Globalization .' • . . ' . .

According to the GlobalizatiQnlndex,some countries are more global than others. The index ranks countries in terms

of their interactions with the rest of the worlcj in the four categories listed on the graph.

Globalization Index Top Ten, 2007

1,000

900

~
800

en
'"
<> 700
c 600
c
'';:
m
500
.!::! 400
OJ
.c 300
5'" 200

100

a
Singapore Hong Kong Netherlands Switzerland Ireland Denmark United States Canada Jordan Estonia
Country

Economic integralion gauges the level of foreign investme nt coming into and leaving Technological connectivity is determined by calculating the numbe r of Internet
a country as well as the extent to which a country's economy is tied to trade, users, Internet host sites, and secure servers in a country.

Personal contact de scribes how we ll a country is connected to the rest of the world Political engagement measures a country's level of contributions to the UN. the
through international phone calls, travel, tourism, and priv ate money sent abroad number of intern ational treaties si gned and organizations joined, and the amount
Isuch as gihs to family). of government mon ey sent abroad (such as foreign aid).

Source: Foreign Policy, Nov.lDec. 2007.

Chapter 16 The Costs and Benefits of Globalization 323


• 16.3 Has Globalization Helped or Developed countries typically have stable political
Hindered Economic Development? and legal institutions, Their courts can enforce prop'
erty laws and contracts. They also have public services
Most economists believe that globalization contrib­ that are essential for economic growth. These include
utes to economic development by increasing trade and power and water services, transportation systems,
investment across borders. Economic development telecommunication networks, and schools. Although
is the process by which countries increase their eco­ poverty exists in these countries, the gap between
nomic output and improve the lives of their people. rich and poor is not as great as it is in poorer nations.
Economic development brings with it improvements The United States, Canada, Japan, Australia, New
in social welfare, including better nutrition, health Zealand, Israel, and most of the countries in Western
care, and education. However, these benefits have Europe are considered developed countries. Singa­
not been spread uniformly among the world's more pore, South Korea, Taiwan, and South Africa are
than 6 billion people. included in this group as well.

Developing countries. The majority of nations in the


Measuring Economic Development
world are developing countries. A developing country
The World Bank and the IMF have a number of ways
is in the process of modernizing its economy. Most
to measure economic development. Most of those
people have enough income to meet their basic needs.
methods focus on such economic indicators as per
However, they have less access to goods and services
capita GDP. Using these indicators, these organiza­
than the average person in a developed country.
tions are able to classify countries by level of develop­
Levels of development and wealth differ widely
ment. The three general classifications most com­
among developing nations. A few, sometimes called
monly used are developed, developing, and least
newly industrialized countries, are making a rapid
developed countries.
transition from agricultural to industrial economies.
Developed countries. The world's wealthiest nations China and Brazil are two examples. Others, such as
are considered developed countries. A developed Saudi Arabia and Kuwait, have high per capita GDPs
country has an advanced, industrial economy and a because of their oil wealth, but they lag behind
relatively high annual per capita GDP. developed countries in other ways.

Key Concept

Developed, Developing, and Least Developed Countries


As these photographs illustrate, countries differ in terms of their levels of economic development.

Developed countries are highly Developing countries are in the Least developed countries are not
industrialized and have an annual process of industrialization and have yet industrialized and have an annual
per capita GOP of more than $10,000 an annual per capita GOP of $1,000 to per capita GOP of less than $1,000
(as of 2008). $10,000 (as of 2008). (as of 2008)

324 Unit 6 Globalization and the Global Economy


Figure 16.3A

Mapping Human Development


The Human Development Index is based on the idea that a country's true wealth is its people. The index rates countries
on three dimensions: life expectancy, education, and living standards. This map shows the HOI rankings in 2008.

Human Development Index Rankings, 2008

Medium human deve lopment

Low human development

Not ranked
Source : United Nati o ns Development Programme .

A common characteristic of developing countries The Human Development Index


is a wide income gap between rich and poor. In Brazil, The United Nations has adopted a broader approach
for example, a small percentage of wealthy families to classifying nations. This approach, the Human
enjoy a high standard of living. Meanwhile, the Development Index, is based on the belief that people
majority of Brazilians live in poverty. are the real wealth of nations. The United Nations
Many developing countries are still struggling sees economic development as a means to help people
to develop governments that can ensure the rule of develop their full potential and lead productive lives
law. Examples include Kenya, Lebanon, and Peru. -but not as an end in itself.
In addition, their public services may not be well The HDI measures a country's level of human de­
developed. As a result, many of their people may velopment along three dimensions. The first is life ex­
lack access to electricity and clean water. pectancy, an indicator that reflects the general health
Least developed countries. A smaller group of the of a population. The second dimension is education.
world's poorest nations are classified as least devel­ The level of education is measured by combining the
oped countries. A least deve loped country, or LDC, adult literacy rate and the enrollment ratio-the per­
has barely begun to modernize its economy. Poverty centage of school-age children attending school.
is widespread and often severe. The third dimension is standard of living. This
Most of the people in LDCs earn a meager living dimension is measured by looking at a country's per
from subsistence agriculture. They raise crops or capita GDP. The more money people have to spend,
livestock mainly for personal consumption rather the better off they are in terms of material goods.
than for sale. The great majority of these countries These three measures are combined to arrive at a
are in Africa. Liberia, Ethiopia, and Mali are a few of country's overall HDI ranking.
Africa's very poor countries. Most of the remaining The map in Figure 16.3A shows how 177 coun­
LDCs are located in Asia, including Afghanistan, tries scored on the Human Development Index in
Cambodia, and Nepal. 2008. The top-ranked country in the "high human

Chapter 16 The Costs and Benefits of Globalization 325


development" category was Iceland. The United To critics of globalization, such statistics are
States ranked twelfth. The "medium human devel­ evidence that free trade is hurting, not helping, poor
opment" category included China and India. These countries. These critics point out that nearly a bil­
two countries are home to more than one-third of lion people-around one-sixth of the world's popu­
the world's people. The countries in the "low human lation-live in extreme poverty. In 2008, the World
development" category were all located in Africa. Bank defined extreme poverty as a state of severe
economic hardship in which people live on less than
The Costs of Globalization for Poor Countries $1.25 per day.
However one measures development, it is clear that Globalization hurts poor countries, critics say,
globalization has not ended global poverty. Between because most trade agreements have been written
1990 and 2005, a period of rapid globalization, many to serve the interests of wealthy countries, not
developing countries experienced healthy GDP LDCs. As Oxfam pointed out in its 2001 report,
growth. But not all of them did.
During this same period, per capita income in Average tariffs in the EU, the United States,
some LDCs remained stagnant or fell. In Haiti, for Canada, and Japan . . . are relatively low, at ap­
example, per capita GDP declined by 2 percent. In proximately five per cent. However, the aver­
Guinea-Bissau, it fell by nearly 3 percent. In a report age obscures very high tariffs in sectors of most
released not long after the Seattle protests, Oxfam relevance to poor countries. Tariffs on some ag­
International, an NGO working to help the world's ricultural commodities are more than 300 per
poorest countries, observed, cent in the EU and, as in the case ofground­
nuts [peanuts}, over 100 per cent in the USA.
Over the past twenty years the income gap
between people living in the LDCs and in the The products that LDCs are best able to export
industrialised world has widened. Twenty tend to be farm products and goods that are easy to
years ago, the ratio of average income in the manufacture, such as clothing. As long as wealthy
LDCs to average income in the industrialised countries block imports of these products with high
world was 1:87. Today it is 1:98, and the gap tariffs and import quotas, globalization will remain,
is widening at an accelerating rate. as its critics maintain, a game with "rigged rules."
-Oxfam International, "Rigged Trade
and Not Much Aid: How Rich Countries The Benefits of Globalization for Poor Countries
Help to Keep the Least Developed Supporters believe that globalization holds out the
Countries Poor," 2001 best hope for relieving poverty around the world .

Figure 16.38

Analyzing the Participation of Least


Developed Countries in Globalization Exports and Foreign Direct Investment
As this graph shows, the world's least devel­ for lDCs. 2004
oped countries are not getting their "fair share"
of export trade or foreign direct investment in Merchandise

terms of their populations. One reason may be exports

trade barriers and agricultural policies in de­


Foreign direct

veloped countries that discourage merchandise '


investment

exports from LOCs. Low levels of human devel­


opment may also discourage outside investors Share of world t-""'l':'~~~~~~""!!:"!!!!!!!!!="""'-~----~
from starting new businesses in LOCs. population 1----:-------0...-..-,..-;---.;... .
Source: UN Office of the High Representative for the
o 2 4 6 8 10 12
Least Developed Countries, Landlocked Developing
Percentage
Countri~s. and Small Island Developing States.

326 Unit 6 Globalization and the Global Economy


Economics writer Charles Wheelan summed up the it was in their rural villages.
benefits of trade for poor countries as follows: "It is necessary to acknowledge that globalization
benefits people unevenly," wrote IMF official Flem­
Trade paves the way for poor countries to get
ming Larsen, "and that it can and does produce losers
richer. Export industries often pay higher
as well as gainers." On the whole, however, support­
wages than jobs elsewhere in the economy. But
ers argue that globalization has produced-and will
that is only the beginning. New export jobs cre­
continue to produce-far more gainers than losers.
ate more competition for workers, which raises
wages everywhere else. Even rural incomes can
go up; as workers leave rural areas for better Key Concept
opportunities, there are fewer mouths to be
fed from what can be grown on the land they Extreme Poverty
In 2008, the World Bank defined extreme poverty as
leave behind. Other important things are going
living on less than $1.25 a day. Since the 1980s, the num­
on, too. Foreign companies introduce capital, ber of people living in extreme poverty has declined,
technology, and new skills. Not only does that despite global population growth. By 2008, the world's
make export workers more productive; it spills poorest people were concentrated in South and Central
over into other areas of the economy. Workers Asia, sub-Saharan Africa, and the mountains of Central
and South America .
"learn by doing" and then take their knowl­
edge with them . Extreme Poverty Around the World
-Charles Wheelan, Naked Economics, 2002

As the pace of globalization has picked up, GDP


growth in poor countries has often exceeded that of
wealthy countries. In 2006, for example, the World
Bank reported that the growth rate for the developing 1981
1,904 million poor
world as a whole since 2000 was more than double
that of developed countries. Growth in many LDCs
was even higher. However, some poor countries saw
their per capita GDP drop because their populations
grew faster than their economic output.
The benefits of globalization are also reflected in
the Human Development Index. A number of coun­
tries with low HDI scores in 1985 have improved sig­
1993
nificantly since then. Examples include China, India, 1,787 million poor
and Indonesia. Many economists attribute this im­
provement to the fact that these countries opened
themselves up to global trade.
Globalization has also helped lift millions of peo­
ple out of poverty. The number of people living in
extreme poverty has declined since 1981. This is true
despite the addition of more than a billion people to 2005
1.400 million poor
the world's population in the same time period.
Supporters of globalization recognize that the
benefits of opening up poor countries to trade come
with costs. Small businesses may fail when faced with Sub-Saharan Africa
East Asia and latin America
the Pacific and the Caribb ean
competition from giant multinationals. Poor farmers
Eastern Europe Middle East and
South Asia • •
may not be able to compete with factory farms in and Central Asia North Africa

rich countries. People who move from farms to cit­ Source: World Bank.
Note: Oue to rounding, figure s do not all add to the total s shown.
ies in search of work may find life there harsher than

Chapter 16 The Costs and Benefits ofGlobalization 327


Singapore is one of the Four
Asian Tigers-along with
South Korea, Taiwan, and
Hong Kong-that benefited
from export-led development.
As Singapore's economy
grew, gleaming skyscrapers
replaced older slums. In 2007,
Singapore was the world 's
fifth wealthiest country, as
measured by per capita GDP.

The Four Asian Tigers: A Case Study of heavily in education and other services to improve
Export-led Development the lives of their citizens. As a result, their levels
Among the greatest gainers benefiting from global­ of human development rose rapidly. Today all four
ization are the four economies nicknamed the Four rank in the "high human development" category.
Asian Tigers. The name refers to the countries of The success of the Four Asian Tigers was so im­
South Korea, Singapore, and Taiwan, along with the pressive that the IMF and World Bank began recom­
former British colony of Hong Kong. In the 1960s, mending the export-led development model to their
all four were relatively poor. Today they rank among clients. From China to Chile, developing countries
the world's developed economies. embraced the new model. By the 1990s, the Tigers
Beginning in the 1970s, the Tigers adopted an faced fierce competition from countries like Vietnam
economic model known as export-led development. and Bangladesh, which had even lower wage rates.
This model emphasizes the production of goods for As a result, the Tigers' GDP growth began to slow.
export as a way of expanding an economy. The sale Critics of export-led development point to a num­
of exports brings in money to buy machinery for ber of problems with this model. The most obvious
factories . With the new machines, more goods are is that it depends on a high level of demand for exports
produced, which adds to economic growth. in wealthy countries, especially the United States. If
Following a pattern established by Japan after that demand drops because of an economic downturn,
World War II, the Tigers developed export indus­ countries that rely on U.S. consumers to buy their
tries that took advantage of their low labor costs. exports will also suffer. As has often been observed,
South Korea, for example, became a major producer "When America sneezes, the world catches a cold."
of clothing and sneakers. Taiwan built factories that
assembled electronic goods. At the same time, their
governments kept tariffs high to protect their new • 16.4 Has Globalization
industries from foreign competition. Helped or Hurt the Environment?
The result was two decades of spectacular eco­
nomic growth. Between 1970 and 1989, the average Many of the protesters at the 1999 WTO meeting in
annual GDP growth in the Tigers ranged from 7 to Seattle were concerned about globalization's effects
10 percent. In contrast, the world average growth on the environment. To show their concern, some
rate hovered between 3 and 4 percent. came dressed as sea turtles, a reference to a WTO
As their economies grew, the Tigers invested decision made the previous year.

328 Unit 6 Globalization and th e Global Economy


The WTO ruling involved a u.s. law designed to landscapes, and endanger wild species.
protect sea turtles. The law banned imports of shrimp Almost all human activity has some impact on
caught in nets that also trap and kill sea turtles. Asian the environment. When farmers clear forests and
countries that depend on shrimp fishing charged that grasslands to plant crops, they are also destroying
the u.s. law violated WTO trade agreements. The the habitats of plants and animals. As developing
WTO ruled that the shrimp ban, like the EU's ban countries shift from agriculture to industry, their
on hormone-raised beef, was an illegal trade barrier. environmental problems multiply. If left unregulat­
Unlike the European Union, however, Congress ed, factories spew smoke into the air and pour toxic
chose to revise U.S. law to comply with the WTO waste into waterways.
ruling. Its decision to do so upset environmentalists The latest environmental challenge confronting the
seeking to protect an endangered species. It also un­ world is climate change. This term refers to variations
derscored what critics saw as the WTO's indifference in Earth's overall climate over time, ranging from
to environmental issues. decades to millions of years. Historically, climate
change was caused by natural processes. Such process­
Economic Development Creates es include volcanic eruptions and variations in the
Environmental Problems intensity of sunlight reaching the planet's surface.
The plight of sea turtles caught in shrimp nets is a Many scientists now believe that human activity
reminder that economic development is hard on the is causing the global climate to become warmer. The
environment. Countries exploit natural resources and main culprit is the burning of fossil fuels in power
develop industries to promote economic growth. But plants, factories, and vehicles. When coal, oil, and
such development may also cause pollution, destroy natural gas are burned, they release carbon dioxide

Figure 16.4A

Mapping Carbon Dioxide Emissions Around the World


Between 1950 and 2006, world carbon emissions hom burning fossil fuel rose from 1.6 billion tons to 8.3 billion tons
a year. For most of that period, the United States was the world's top emitter. By 2006, China had moved into the
top spot. However, on a per capita basis, the average American emitted five times as much carbon dioxide as did
the average Chinese person.

Global per Capita Carbon Dioxide Emissions, 2004

.....,

C02 Emissions

(in metric tons

per person)

0.00--5.00

15.01-30.00
_ 30.01-70.00
Source: United Nations.

Chapter 16 The Costs and Benefits ofGlobalization 329


and other gases. These gases act like a greenhouse in impact that rapid economic growth has on the envi­
the atmosphere, trapping energy from the sun near ronment. Markets may do well at coordinating trade,
Earth's surface. environmentalists concede. But by putting profits
A 2007 UN report on climate change warned that first, markets often overlook the environmental
average global temperatures are likely to rise between costs of economic activity. As one environmental
3.5 and 8 degrees Fahrenheit by the end of this cen­ economist wrote,
tury. Environmental writer Fred Pearce detailed the
Though the market is a powerful tool for eco­
effects of this global warming:
nomic progress, where its edges meet the planet
Melting glaciers and precipitation are causing it is mainly [used] as a saw, shovel, or smoke­
some rivers to overflow, while evaporation is stack-as an instrument of destruction rather
emptying others. Diseases are spreading. Some than protection.
crops grow faster while others see yields slashed -David Malin Roodman, The Natural
by disease and drought. Strong hurricanes are Wealth ofNations: Harnessing the
becoming more frequent and destructive . .. Market for the Environment, 1998
Clashes over dwindling water resources may
Environmentalists are not opposed to economic
cause conflicts in many regions.
development. But they believe development should
As natural ecosystems-such as coral reefs­ be sustainable over time. Sustainable development
are disrupted, biodiversity is reduced. Most is designed to meet people's present needs without
species cannot migrate fast enough to keep up, having a negative impact on future generations'
though others are already evolving in response ability to meet their needs. For example, a lumber
to warming. company that plants as many trees as it cuts down
-Fred Pearce, "Instant Expert: each year is practicing sustainable development.
Climate Change," NewScientist.com, 2006 Unfortunately, say environmentalists, most cur­
rent development is not sustainable. Globalization is
making millions of people in the developing world
The Costs of Globalization for the Environment rich enough to live like Americans. As a result,
Environmentalists do not blame all of these prob­ global demand for luxury goods, such as computers
lems on global trade. But they worry about the and cars, is rising. The same is true for the fossil fuels

Before China globalized its


economy in the 1990s, few of its
citizens could afford their own
cars. But by 2008, the number
of privately owned cars in China
topped 15 million. One result has
been a rapid rise in pollution. Ac­
cording to the World Bank, China
had 16 of the 20 most air-polluted
cities on Earth in 2006.

330 Unit 6 Globalization and the Global Economy


Figure 16.4B

.Analyzing the Relationship Between


Income and Environmental Quality The Environmental Kuznets Curve
The environmental Kuznets curve illus­
Turning point
trates a theoretical relationship between
per capita income and the quality of a
country's environment. .~'"
• As incomes begin to rise, environmen­
e'"
-0

tal quality declines. This may be due to


c""
'"
industrialization or lifestyle changes ]i
as people begin to consume more. '"'"E
• At some income level, people begin to

demand a cleaner environment. From

e'"
·s
that point on, increased per capita
w'"

income leads to improved environ­

mental quality.

Per Capita Income

needed to power them. "Trying to meet that kind of The Benefits of Globalization for the Environment
demand," cautioned environmentalist Bill McKibben, Supporters of globalization recognize that develop ­
"would stress the earth past its breaking point." ment has environmental costs. They argue, however,
Environmentalists also worry that globalization that the best way to address those costs is not by
may encourage multinational corporations to move slowing economic growth. The answer, they say, is
their operations to "pollution havens." A pollution to speed it up.
haven is a country that attracts polluting industries To explain why, economists point to the environ­
because of its weak or poorly enforced environmen­ mental Kuznets curve. This theoretical curve shows
tal laws. "'Pollution havens' ... have failed to mate­ pollution increasing as a country begins to industrial­
rialize," reported the World Bank in 2000. "Instead, ize. When incomes start to increase, people are more
poorer nations and communities are acting to interested in raising their living standards than in con­
reduce pollution because they have decided that the trolling pollution. As they grow wealthier, however,
benefits ... outweigh the costs." But the possibility this attitude begins to change. People become con­
that such havens might emerge remains a concern. cerned about dirty air and waterways and demand
More worrisome yet is the link between global­ that their governments do something about it. The
ization and climate change. Moving people and goods wealthier that people become, the more resources they
around the globe by air and sea produces more than seem willing to devote to improving the environment.
6 percent of the world's carbon emissions. And as There is historical evidence suggesting that people
the economies of developing countries grow, their will do more to protect their environment as they
consumption of fossil f~els increases as well. This grow richer. The city of London, for example, had far
adds still more greenhouse gases to the atmosphere. worse air pollution a century ago than it does today.
If nothing is done to reduce these emissions, en­ Lake Erie was pronounced "dead" in the 1960s. To­
vironmentalists warn, the effect on the environment day, the lake has one of the world's largest freshwater
could be devastating. "In 'this century, human activity fisheries. And as recently as 2008, China's govern­
could trigger an irreversible melting of the Greenland ment announced that it was shifting from growth
ice sheet and Antarctic gbciers," wrote Fred Pearce. at the expense of the environment to "putting equal
"This would condemn the world to a rise in sea level emphasis on both."
of six metres-enough to flood land occupied by Given this history, some economists describe a
billions of people." clean environment as a luxury good. However, they

Chapter 16 The Costs and Benefits of Glo balization 331


also note that the relationship between income and Begun in the 1970s, this campaign brought together
environmental protection is strongest for visible pol­ the International Whaling Commission, sovereign
lution. Examples include smoggy skies and sewage­ nation-states, and NGOs in an effort to protect
choked rivers. It is weaker for problems that people endangered whale species.
do not see every day, such as carbon emissions and For centuries, whales had been hunted for their
loss of forests . "The quick and dirty rule seems to be meat and oil. By the 1950s, however, modern whaling
that if you can't see it or smell it in your local urban methods had brought many whale species to the brink
neighborhood," noted economics writer Andrew of extinction. The number of blue whales, for exam­
Leonard, "then, no matter how rich you are, you ple, had dropped from between 30,000 and 40,000 in
aren't going to do much about it." the 1930s to 2,000 or fewer in the 1960s.
Globalization may also benefit the environment by The International Whaling Commission was es­
fostering international cooperation to solve problems. tablished in 1946 to manage whale harvests. In 1982,
For example, in 1985, British scientists discovered under immense pressure from NGOs, the commis­
that synthetic chemicals were thinning the ozone sion imposed a moratorium, or ban, on whaling. The
layer in Earth's atmosphere. The ozone layer protects moratorium applies only to commercial whaling.
the planet from harmful ultraviolet rays given off by Whales may still be caught for scientific purposes or
the sun. Overexposure to these rays can cause skin by native peoples who depend on whales for food.
cancer and damage eyes. The Save the Whales campaign was evidence of the
Recognizing the danger, world leaders met in growing power ofNGOs. Working together, antiwhal­
1987 to sign the Montreal Protocol on Substances ing groups persuaded people around the world that
that Deplete the Ozone Layer. Hailed by the U.S. protecting whales was important. As a result of the
Environmental Protection Agency as "the world 's hunting ban, the stocks of many whale species are
most successful international environmental treaty," no longer in decline. Some are even on the rebound.
the protocol ended production of the most harmful The world has done less well in protecting other
chemicals. Since the treaty went into effect, the thin­ forms of marine life. Because of overfishing by com­
ning of the ozone layer has stopped. Full recovery, mercial fishing fleets, around 75 percent of fish stocks
however, may take many lifetimes. are being harvested at unsustainable levels. As a result,
many fish species are in danger of extinction. Making
Whaling: A Case Study of Global matters worse, the oceans are being polluted at an
Environmental Cooperation alarming rate. Whether the world can come together
Another example of global cooperation to protect to save the oceans and marine life, as it did whales,
the environment is the Save the Whales campaign. remains an open question.

As part of its effort to protect


whales, the International
Whaling Commission pro­
motes whale watching as '"a
sustainable use of cetacean
[sea mammal] resources."
Whale-watching tours earn
welcome tourist dollars for
former whaling communi­
ties. At the same time, these
tours allow the public to
see whales in their natural
environment.

332 Unit 6 Globalization and th e Global Economy


16.5 Does Globalization Enrich or

Threaten Local Cultures?

On August 12, 1999, a group of farmers and anti­


globalization activists drove their tractors into a
town in southwestern France. There they destroyed
a McDonald 's restaurant that was under construc­
tion, dumping the rubble on the outskirts of town.
"I believe that the French people," declared Jose
Bove, the group's leader, "are with us in this fight
against junk food and against globalisation."
For Bove and his supporters, globalization-as
symbolized by McDonald 's-was a threat to French
culture. In their eyes, it undermined local traditions
of fresh food and small-scale agriculture. For many
other people, however, globalization is a positive
force that enriches local cultures.

The Global Reach of American Culture


Bove's attack was not only directed at globalization. It
was also an assault on Americanization-the spread American business interests, including the entertainment
of American customs and culture to other countries. industry, have carried U.S. culture to the far reaches of the
For many of its critics, globalization and American­ globe. Disneyland is one example . The first overseas Disney­
land opened in Tokyo, Japan, in 1983. Two more parks followed:
ization are one and the same.
Disneyland Paris, in France, and Disneyland Hong Kong.
Over the past several decades, American fads,
foods, and fashions have spread rapidly around
the world. Much of this Americanization has been national issues or feature non-American actors in
carried out by multinational corporations. Ameri­ starring roles.
can-based companies can be found in almost every Commercial interests are not the only force
corner of the globe. On a visit to Beijing, China, driving the spread of American culture. Language
anthropologist James L. Watson noted, also plays a part. English is one of the most widely
spoken languages in the world, used by as much as
Looming over Beijing's choking, bumper-to­
one-fifth of the world's population. Many people
bumper traffic, every tenth building seems to
around the world also respect the American tradi­
sport a giant neon sign advertising American
tions of freedom and democracy. They admire the
wares: Xerox, Mobil, Kinko's, Northwest Air­
spirit of openness and innovation in American life.
lines, IBM, Jeep, Gerber, even the Jolly Green
Nevertheless, the spread of American culture
Giant. American food chains and beverages
concerns many critics of globalization. Some see it as
are everywhere in central Beijing: Coca-Cola,
cultural imperialism, the imposing of one country's
Starbucks, .. . Baskin-Robbins, Pepsi, TCBY,
culture or language on another country. Usually, the
Pizza Hut, and of course McDonald's.
charge of cultural imperialism is made by people in
-James L. Watson, "China's Big Mac Attack,"
a small or weak country who fear domination by a
Foreign Affairs, 2000
larger, more powerful country.
Americanization is also evident in popular culture.
American music, movies, and television shows are The Costs of Globalization for Local Cultures
popular throughout the world. Some of these cultural The main criticism of globalization from a cultural
products have been created with the global market perspective is that it weakens local traditions. Like
in mind. Such globalized films may deal with inter- Jose Bove, many people worry that their own way of

Chapter 16 The Costs and Benefits of Globaliza tion 333


Key Concept

language Extinction
More than halfthe world's 7,000 languages are expected to go extinct by 2100. Languages die when their community
of speakers chooses to speak the tongue of the dominant culture for economic or social reasons. This map shows
several key areas of language extinction. Some of these areas include many small language communities, each with
its own native tongue.

language Extinction Around the World, 2007

..,

.. ~'~" .

Area where many


languages are in
danger of extinction
Source: National Geographic, Living Tongues Institute for Endangered Languages .

life will be lost amid a flood of imported culture. tural imports. In many villages, for example, people
Critics point to the rapid extinction of languages have swapped their traditional clothing for jeans and
as one cost of globalization. As the English language T-shirts. Teenagers are more interested in television
and Western cultural influences spread across the shows and popular music from abroad than tradi­
world, many smaller, local languages are dying out. tional folklore and music. They choose hamburgers
Language experts predict that more than half of the and pizza over traditional foods .
world's 7,000 languages will disappear by the end of This problem is not limited to developing nations.
the century. The map above shows areas oflanguage In the 1960s, u.s. movies earned only about 35 per­
extinction around the world. cent of European box office revenues. Today that fig­
Language is an important vehicle for the preserva­ ure ranges between 80 and 90 percent. In response,
tion of culture. This is especially true for native peo­ some countries have enacted laws to preserve local
ples in the developing world, who may not have a writ­ cultural products. France and Canada, for example,
ten language. When a language dies, it takes with it have imposed limits on cultural imports, such as
a wealth of human knowledge, especially about the American magazines, movies, and television programs.
natural world. "Most of what we know about species Cultural evolution is nothing new, of course. It is
and ecosystems is not written down anywhere," ob­ a natural process that has been taking place for thou­
served linguistics professor David Harrison. "It's only sands of years. But critics warn that globalization is
in people's heads. We are seeing in front of our eyes speeding up the process of cultural change, often
the erosion of the human knowledge base." with commercial interests in mind. They fear that
Along with the loss of language, many peoples the rich, vibrant mosaic of world culture will be
are seeing their own traditions crowded out by cul- replaced by a bland "McWorld," where all cultures

334 Unit 6 Globalization and the Global Economy


resemble that of the United States. As Julia Galeota, own rivals," Cowen observed, "by bringing creative
who at the age of 17 wrote a prize-winning essay on technologies like the recording studio or the print­
cultural imperialism, observed, ing press to foreign lands."
Although globalization is often seen as a one-way
Throughout the course ofhuman existence,
flow-from rich to poor nations-it goes the other
millions have died to preserve their indigenous
way, too. Customs and traditions from developing
culture. It is a fundamental right of humanity
nations also influence the developed world. The fact
to be allowed to preserve the mental, physical,
that restaurants in the United States serve food from
intellectual, and creative aspects of one's soci­
Thailand or Ethiopia is a sign of globalization. So
ety. A single "global culture" would be nothing
is the fact that Americans watch Bollywood movies
more than a shallow, artificial "culture" of
from India, listen to Afro-pop music from Nigeria,
materialism.
- Julia Galeota, "Cultural Imperialism: and furnish their homes with crafts from Indonesia.
An American Tradition," 2004 Artists and artisans in developing countries
benefit from the chance to sell their products in the
The Benefits of Globalization for Local Cultures developed world. By gaining a larger market for their
Supporters of globalization see a different result work, many are able to preserve their art, music, and
from the interaction of world cultures. They contend traditional crafts.
that globalization enriches local cultures by expos­ The idea that cultures should be protected from
ing people to new ways of doing things. Rather than change is wrongheaded, say supporters of global­
a bland "McWorld," they say, the result is a "global ization. No one is forced to speak English or eat at
village," where cultures share ideas and customs but McDonald's. People make such choices voluntarily.
retain their distinct identities. "China has become more open partly because of
"Critics of cultural imperialism charge that rich the demands of ordinary people," observed Watson.
cultures dominate poor ones," wrote economist Tyler "They want to become part of the world."
Cowen. What they fail to see is the degree to which In Nepal, the people who live near Mount Everest
"local culture commands loyalty." In India, for ex­ have adopted new customs through contact with for­
ample, domestic recordings dominate 96 percent of eign tourists. Mountain climber Jon Krakauer sees
the music market. "Western culture often creates its some of these changes as negative. But he also says

Figure 16.5

Tracking Online Language Use


language Use in Wikipedia, 2001-2008
When first developed, the Internet
was dominated by English-language
.,'" 280
.z:::
100 .!::!
<>
'; :
-;;,
90 w=
speakers and articles. In recent Years, 260
however, it has become a vehicle for .,
ct
240 .:
language preservation bylinking~peak­
:c., 220 80 .,'"
~ 200 70
<>
';:
ers ofendangered tongues. This graph
~ 180 ct
.,
shows a rapid increase in the number = 60
160 :c.,
.,'"~
of languages used in articles written 140 50 Co
:.;;;
for Wikipedia, the online ency.clopedia, 120
40 ~
:::>

between 2001 and 2008. As a result,


the percentage of articles written in '
.,=en
.....
Q
100
80 30
-..,,
0

en
60
English has decreased sharply. Q;
-=E 40
20 E.,u
:::> 10 Q;
z 20 D­

I 0
2001 2002 2003 2004 2005 2006 2007 2008
O

Year
Source: Wikipedia.

Chapter 16 The Costs and Benefits of Globalization 335


This McDonald's restaurant in
New Delhi,lndia, is much like a
McDonald's in the United States.
But the menu reflects the fast food
chain's adaptation to local culture.
The Maharaja Mac-made from
mutton-and the vegetable burger
are both designed to appeal to
Indian tastes .

that local people have benefited from global contact. McDonald's: A Case Study of Cultural Adaptation
Money from tourism and grants from international McDonald's is a powerful symbol of globalization
organizations have funded new schools, medical clin­ for supporters and critics alike. The American fast
ics, and many other improvements. Krakauer wrote, food chain has more than 30,000 outlets in more
than 119 countries around the world. Many critics
Most of the people who live in this rugged
claim that McDonald's imposes American cultural
country seem to have no desire to be severed
values wherever it goes. But the reality is more
from the modern world or the untidy flow of
complex. Although McDonald 's has brought
human progress. The last thing [they] want changes to other countries, it has also adapted to
is to be preserved as specimens in an anthro­ local cultures.
pological museum. Everywhere McDonald's sets up a branch, it fol­
-Jon Krakauer, Into Thin Air, 1997 lows certain standard practices. The menu is the same
Cultural diffusion-the process of sharing ideas -burgers, fries, and shakes-and the restaurant is
and knowledge across cultures-is often disruptive. clean and modern . Over time, however, many bran­
But it is also productive and leads to new ways of life. ches have changed their menus to suit local tastes.
It can even help spread universal ideals, such as respect In Norway, you can get a salmon sandwich. In India,
for human rights and freedoms. As Cowen observed, where many people do not eat beef or pork, you can
order a mutton burger, called a Maharaja Mac. Or,
Culture is not a zero-sum game, so the greater if you do not eat meat, you can get a spicy vegetarian
reach of one culture does not necessarily mean patty made of peas and potatoes. French diners can
diminished stature for others. In the broad order espresso coffee and brioche along with their
sweep of history, many different traditions have burgers and fries.
grown together and flourished. American pop­ The style of the restaurants can vary, too. In
ular culture will continue to make money, but France, for example, many branches have been
the 21st century will bring a broad melange of remodeled to reflect local architecture. "Far from
influences, with no clear world cultural leader. being cookie-cutter copies," Shirley Leung reported
-Tyler Cowen, "Some Countries Remain in The Wall Street Journal, "each of the remodeled
Resistant to American Cultural Exports," restaurants features one of at least eight different
New York Times, Feb. 22, 2007 themes-such as 'Mountain,' complete with a

336 Unit 6 Globalization and the GLobal Economy


wood-beam ceiling reminiscent of a ski chalet. The paper, or doing their homework. Such behavior would

company has even begun to replace its traditional be unusual, and probably discouraged, at an Ameri­

red-and-yellow signs with signs in muted tones of can fast food restaurant.

maroon and mustard." All of this suggests that globalization is neither

At the same time, McDonald's has had an impact simple nor predictable. It is a complicated process,
on local cultures. In China, for example, people do not with many costs and benefits, that is changing the
traditionally celebrate children's birthdays. After Mc­ world in unforeseen ways. What does seem clear
Donald's introduced American-style birthday parties, is that as long as countries continue to trade and
however, many Chinese families adopted the custom. interact, globalization in some form will continue.
McDonald's also introduced a higher standard of As economist Lester Thurow wrote,
cleanliness-including clean public bathrooms-than
was typical of Chinese restaurants. As a result, many Fifty years from now few of us will be apt to
Chinese customers began demanding similar stan­ say we work in the u.s.
economy or the Japa­
dards of hygiene elsewhere. nese economy. We live in the United States or
One custom the Chinese have not adopted is the Japan, but we work in the global economy.
"eat and run" style of dining typical of a McDonald's -Lester Thurow, Fortune Favors the Bold:
in the United States. At Chinese branches, customers What We Must Do to Build a New
may linger for hours, socializing, reading the news- and Lasting Global Prosperity, 2003

Summary
- - ~ - -- -- - .
. . . ". .." . . .

Globalization means many things to many people. In essei1Ce, it is the integration of .

economies and societies around the world. Critics emphasize its costs, however, while

supporters point to its benefits. . .

. .

Who are the main players in the globalizationdebate? Four main groups play key roles .
in globalization: (1) internationalorganizations, such as the World Trade Organization;
(2) nongovernmental organizations; stich as the World Wildlife Fund; (3) multinational

corporations, such as McDonald's; and (4) sovereign nation-states . .

. Has globalization helped or hindered economic development? For many developing


countries, globalization has been the key to growing their economies and raising living
standards. However, some ofthe world's less-developed countries have failed to experience
such economic gains.
. .

Has globalization helped o.rhurt the environment? Although globalization is not the
root cause of most environmental problems, it may contribute to them by encouraging
industrialization. However, as countries develop, theyalso begin to do more to protect the
environment. Globalizationmay help solve problems like climate change by promoting
international cooperation.
Does globalization enrich or threaten local cultures? Globalization brings cultures

together in ways never experienced before. In some cases, the flood of Western products

and ideas may crowd out local traditions and customs. At the same time, globalization .

enriches cultures by introducing new ideas, technologies, foods, and arts that canbe

adapted for local use and enjoyment. . .

Chapter 16 The Costs and Benefits of Globalization 337


16 The Power to Choose

-~- -

What can you


do to fight global Reducing Your Carbon Footprint

warming? by Clayton Sandell, Many people have employed


ABC News, June 7, 2006 a number oflow-tech ideas that
As an individual, there is little Erik Daehler loves to travel. But all playa small part in reducing
you can do to shape the course every time he gets on an airplane, their footprints: reusing canvas
of globalization. But there are he knows his carbon footprint shopping bags, taking shorter
things you can do to limit some gets bigger . .. What, might you showers, and walking or riding
of its negative effects. You can ask, is a carbon footprint? a bicycle for short trips around
buy Fair Trade products, for ex­ A carbon footprint is the town.
ample, thus helping producers measure of the amount of Increasingly, many have
in developing countries raise carbon dioxide-the major turned to Web sites that offer
their standard of living. You can man-made global warming carbon calculators, which add
become a member of an NGO greenhouse gas-that goes into up how much carbon dioxide
or other group that works on the atmosphere as you go about gas their lifestyle puts into the
globalization issues. Or you can your daily life. Almost every­ atmosphere. You increase your
take steps to curb the carbon thing you do affects it: turning carbon footprint by driving a
emissions that you contribute on a coffee maker, driving a car, sport utility vehicle, for ex­
to global warming. buying food- and in Daehler's ample, or reduce it by driving
The following article ex­ case-taking a ride on a pas­ a hybrid.
amines ways that people can senger jet.
reduce their carbon footprints. Air travel accounts for about Energy Efficiency
As you read the article, think 3.5 percent of the human con­ Experts say one of the first
about the changes you and your tribution to global warming, things you can do to reduce
family might make to help slow according to the Intergov­ your carbon footprint is to get
global climate change. ernmental Panel on Climate smart about energy efficiency . ..
Change. The good news is you "Efficiency is the least expensive
can offset-if not eliminate­ way to cut down on your carbon
your carbon footprint by mak­ footprint," said John Steelman,
ing choices that can even save director of the climate program
you money . .. at the Natural Resources
Making these kinds of Defense Council [NRDC] .
choices has become a growing On average, every American
trend among people who want is responsible for about 22 tons
to reduce the size of their carbon of carbon dioxide emissions ev­
footprints. At the same time, they ery year, according to statistics
must grapple with the question compiled by the United Nations.
of whether their actions really That is far above the world aver­
make any difference. age of 6 tons per capita. Thus,

338 Unit 6 Globaliz ation and th e Global Economy