A Review of the Literature
December 18th, 2012
A Review of the Literature
Globalization, in the economic sense, refers to the cross border transactions of goods and services between different countries across the globe through the elimination of trade barriers. However, globalization is not limited to only its economic sense. There are also political and cultural meanings to the word as well. The cultural exchange that takes place along with globalization increases interdependence, integration and interaction among people, industry and government in many different locations around the world. The theory behind globalization is to create worldwide openness of trading with the hopes in promoting wealth across all of the nations. Even though it is hard to envision globalization prior to this century, it actually did occur, just on a much smaller and simpler scale and can be dated back to thousands of years ago. Globalization is a process that began with the very first movement of settlers from one area of the world to another. The exchange of goods, ideas and people that we experience today is part of long term historical trend. Throughout this history of mankind, people’s desire for something bigger and better has motivated them to move themselves, their goods, their ideas and customs around the world. There were a few main motives that drove early civilizations to leave their family and homes behind for exploration. One was the desire for conquest, to ensure security of their homeland and extend political power. Mankind has always been known for their need for exploration and their desire to conquer. Another motive would be looking for prosperity, or searching for a better life for their family. Even though people were creative and pretty good at utilizing everything they had access to, to improve upon their daily life on their homeland they knew that other lands and civilizations must have goods that they did not have and the potential to trade off their goods would help them even more. There was also proselytizing, or spreading and converting others to their faith. The more followers in their church or group, the stronger they became as one. People of all kinds, soldiers, sailors, preachers and mere adventurers all played a role in the dawn of globalization. As the methods of communication and modes of transportation have increased over the years, so has the concept and need for globalization. Since World War II, many governments have adopted a free-market economic system which has vastly increased their own potential for productivity by allowing more opportunities for international trade and investment through the movement of commodities, money, information and people. Other governments have only reduced their trade barriers, or tariffs, which in turn limits their international trade abilities. Some governments choose to do so usually to protect their local manufacturers or to simply increase revenue. Very early on, the United States themselves put some tariffs in place around the late 1700’s, in order to pay off the debts from the Revolutionary War. On a temporary basis, revenue raising tariffs become less of a dire need after the16th amendment was ratified in 1913, which imposed the Federal Income Tax. Soon afterwards though, World War I began, which upon its end it destroyed the first age of globalization. The U.S. had only a few years of economic prosperity, riding upon the impending inflation balloon, before it finally burst with the stock market crash of 1929, throwing us and...
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