Globalization is the Process of Interaction and Integration of Different Nations

Introduction

Globalization

Globalization, as defined by The Levin Institute of The State University of New York, “is a process of interaction and integration among the people, companies, and governments of different nations.”

Globalization is a centuries old practice, affecting production as well as consumption, and is driven by investment and trade and supported by information technology. Over time, globalization has also become a political issue. Today many governments have adopted free-market economic systems, negotiated for reductions in trade barriers, and have established world-wide agreements to promote trade in goods, services, and investment (Levin Institute). In recent history, globalization has expanded rapidly due to advances in communication technology and transportation (Carbaugh pg. ).

On the production side, these political gains in globalization, communication, and transportation have led to countries, industries, companies, and individual entrepreneurs to greatly increase production, output, sales, and often profits, as well as creating countless new opportunities for international trade and investment. On the consumption side, the gains have given consumers greater choice, lower prices, and higher quality products.

The effects of globalization are profound. Globalization has effects on the environment, culture, political systems, economic development, national prosperity, and citizens in societies around the world (Levin Institute).

As world economies become increasingly integrated through globalization, it creates interdependence among countries. The economic welfare of any given nation has fast become increasingly dependent upon the economic welfare of its trade partners (Solem, Muñiz-Solari, Ray, eds.). ...

... middle of paper ...

...s affecting the world's overall supply. Cotton growth is dependent on Mother Nature. Extreme weather conditions can destroy a nation's cotton supply, affecting their GDP, import and export rates, inflation rates, and price. This in turn will affect other nations of the world, their GDP, import and export rates, and inflation rates.

One can also conclude that incentives should be given to encourage farmers to grow cotton rather than more profitable crops. A consistent supply of cotton is needed to keep cotton prices stable. Volatile cotton prices affect those countries and companies in the textile industry, and eventually end consumers world-wide.

From the analysis above, one can derive that the world's cotton market is extremely interdependent. Factors effecting the supply or demand in individual countries have a profound impact on other countries and the world.