The Effects of Human Interdependence & Globalization

Instructor: David Juliao

David has a bachelor's degree in architecture, has done research in architecture, arts and design and has worked in the field for several years.

We often hear that we live in a globalized world and that countries are interdependent, but what does it mean? In this lesson, explore globalization and the interdependence of human societies and examine some economic, political and social effects.

A Smaller World

Think about the products you have.

We have access to product from many different places
Supermarket

Last time you went shopping, maybe you bought fruits from South America, tea from Southeast Asia and fish from Europe. Your computer might have local components and Asian parts. Perhaps the clothes you are wearing were made in India, your car came from Japan and you just video called a friend halfway around the world.

We live in an interconnected world and countries' economies are linked with each other. We have access to products from many places and locally-produced goods are often exported. Moving freight from one corner of the world to the other is now common and sometimes even less expensive than moving it locally.

Interdependence of Human Societies

Interdependence describes when two or more actors impact and rely on each other. Consider the flour industry, for example. One person specializes in growing crops, another on milling, one on packing, distributing and finally selling it. They need each other to deliver the final product and if one day the mill stops, everyone is affected; they are all interdependent.

Think of those individuals as a country, and the flour as the products and services we consume. This gives you an idea of the interdependence of human societies. We fulfill our needs by relying on a massive network of other people.

Nowadays, most countries are also interdependent because they rely on other countries for supplying local demand and for selling local products. This interdependence is strong, and one nation's actions often have consequences on others. For example, China's labor costs impact employment in other countries, Russia's policies on gas affect transport costs in Europe, and air pollution generated in the United States has global effects.

Most countries are interdependent
International flags

Globalization

Globalization is often defined as the interaction and integration of people in different areas of the world. This broad term groups together economic, social and political interactions.

Since antiquity, human societies have developed forms of globalization. The Silk Road once connected China, Central Asia, Persia and Europe, and facilitated commercial and cultural exchange. However, the globalization we are experiencing nowadays is the biggest and fastest in human history.

Technological advances in communications and falling costs of transportation have facilitated international exchanges. Multinational companies operating in several countries, outsourcing of services and operations, international free trade agreements, internet access and international migrations are some examples of globalization.

Transportation facilitates globalization
Containers

Effects of Human Interdependence and Globalization

Human interdependence and globalization have had both positive and negative effects on economics, societies and politics. Let's examine some of these effects.

Economics

Competition is a positive effect. Domestic companies compete with foreign firms, often raising their standards. Foreign businesses often bring innovations and new approaches, trying to capture the consumer. This dynamic usually increases the quality of products and services and makes them more affordable. For example, American oil companies operate in many developing nations and have formed alliances with local capitals, bringing technology, employment and making huge investments.

Most nations have opened to international trade, creating a global market and directing investments into the developing countries. Companies from industrialized nations look for new markets and possibilities and sometimes open operations in new countries, bringing investments and employment.

Globalization also affects employment. Jobs are generated in new areas, but are sometimes lost elsewhere. Imagine you own a company with 100 workers and decide to relocate to Thailand, where labor costs are lower. There you hire 150 workers, which means 150 new positions for Thailand, but back home 100 people just became unemployed. The world has 50 more people earning wages, but there were also losers in this process.

The lower cost of Chinese labor is attractive to many multinational firms
Workers

Globalization has helped some areas progress towards industrialization, including countries like India, the Philippines, Mexico, and Brazil. On the other hand, some areas of North America and Europe have suffered loss of jobs and businesses.

Politics

In an interdependent world, nations tend to cooperate more with each other. Some even argue that big wars are less likely to happen because countries need each other.

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