Globalization refers to the worldwide phenomenon of increased technological, economic, and cultural interconnectedness between nations. In a globalized economy, the world’s markets and businesses are not isolated entities whose activities are confined within the borders of individual nations. Rather, those markets and businesses are connected to counterparts in other countries all across the globe; economic activity is unrestricted by time zones or national boundaries. There is an international exchange of labor force, ideas, knowledge, products, and services. This trend has accelerated dramatically in the past two decades, as technological advances (most notably the rise of the Internet and advances in telecommunications infrastructure) have made it easier for people to travel, communicate, and do business internationally.

The expansion of international trade and foreign investment was sparked not only by technological progress, but also by two major sociopolitical developments of the 1980s. One of these was the collapse of global communism. The fall of the Berlin Wall and the subsequent dissolution of the Soviet empire unleashed 400 million people from the shackles of closed, centrally commanded economic systems. The second development was the demise of the Third World’s reliance upon import substitution (a trade and economic policy founded on the idea that a developing country can increase its wealth by importing as few goods as possible and relying instead on locally produced substitutes). When import substitution proved to be a colossal failure, struggling countries all over the world (starting with Chile in the mid-1970s and China later that decade) began opening their markets and welcoming foreign investment.

Opponents of globalization characterize the phenomenon as a form of Western expansionism and cultural imperialism, claiming that it will merely increase the opportunities for wealthier nations (and their multinational corporations) to take advantage of poorer ones. This happens, the critics say, because multinational corporations can exploit the cheap labor and lax regulations typical of developing countries where there are no labor unions. Believing that a planned economy ensures the greatest economic benefit to the poor, the anti-globalization movement tends to favor socialism over capitalism. It also warns that globalization could eradicate regional diversity and lead to a homogenized world culture where “native” cultures are swallowed up by Western traditions.

Supporters of globalization respond by pointing out that over the past twenty years, every nation that has experienced an increase in its manufacturing output has also seen its per capita income rise; that nations open to trade tend to be much more prosperous than nations with closed economies; and that the increased wages spawned by globalization correlate with reduced poverty and improved living conditions for all. The most impressive gains in this regard have been realized in East Asia.

Advocates of globalization also assert that free trade, by raising a society’s general standard of living, helps people achieve higher levels of education, thereby fostering the growth of a larger and more independently minded middle class that can spearhead the movement toward more representative forms of government. Examples of such developments can be seen in Taiwan and South Korea, which were essentially dictatorships just two decades ago but are now governed by presidents and elected legislatures, and are now characterized by civil liberties protections and free political debate. Similarly, the movement toward economic liberalization in Latin America has helped usher in an era of representative governments in the region.

The two most prominent pro-globalization organizations are the World Trade Organization and the World Economic Forum. The former is a pan-governmental entity (which currently has 144 members) that was established to formulate a set of rules to govern global trade through the process of member consensus. The latter is a private foundation that does not possess decision-making power but is a powerful networking forum for many of the world’s business, government, and not-profit leaders.

In this section of DiscoverTheNetworks, the category titled Globalization Defined explores the cultural and economic interconnectedness that exists among far-flung societies all around the world; this interconnectedness is due, in large measure, to the explosive evolution of transport and communication technologies. Vis à vis economic issues, the term "globalization" is commonly used interchangeably with "capitalism."

The category titled Globalization and Capitalism Examined and Debated explores arguments that are commonly made in favor of, as well as against, globalization as a growing trend both culturally and economically.