Globalization and…home economics…?!

Have you ever wondered why people constantly bang on about globalization? Or do you worry about the effect you think it’s having on you or your family and friends? Are you concerned about it, or do you think it’s actually a good thing?

And are you now wondering why on earth I’m banging on about globalization on a home economics website?!

Yep, I know it seems absolutely nuts, but it’s true! Globalization and home ec go together like fish and chips, gin and tonic, peas and carrots…! [Honest Guv.]

The world is a little crazy. [I was going to add ‘at the moment,’ but actually, the world is crazy…]

There’s a lot of stress and uncertainty around, and globalization takes the wrap for a lot of it. But home economics is the tonic you need to help you live with it.

You see, home ec can do more than help you just live with globalisation. It can help you to surf it, sail it, and THRIVE on it!

Because there is no escape…

Globalization impacts almost everything.

Start by thinking about your own home:

  • Your news channel is broadcast from around the world;
  • Your morning coffee may come from South America, Africa or Asia;
  • Smartphones and apps like WhatsApp or Messenger allow us to send and receive messages globally;
  • Your iPad, or other electronics, are often made in, and shipped from China;
  • Your family and friends may be a mix of cultures and backgrounds – Christian, Muslim, Sikh, Jewish, white, black, brown…pink with green spots…you name it!
  • New workplaces and employment sectors, such as the gig economy or computer programming, are forming all the time. Who’d heard of Uber, Airbnb, Deliveroo, or even Google, a few years ago? (Ok, so Google goes back a bit further. But you get the gist.)

These are only a few ways that globalization impacts all of us, every single day. I think all of them are pretty exciting things. I’m sure you can think of many more.

Globalisation. A picture of a white smartphone and a cup of coffee.

For many of us, the world is moving at a really fast pace. The days when we were born, lived and died in the same place are gone too. To boot, we often depend on others much further away than we depend on those nearby. (Think about where your food comes from or where you get your clothes, for example.)

But this type of dependence has a cost. It can make you feel really vulnerable and isolated. (People panic buying before Tesco shuts for a bank holiday highlights this!)

And this vulnerability can be pretty stressful.

Just think about the coronavirus lockdown.

Home economic thinking and the coronavirus pandemic

As I’m writing this blog post, I’m currently in enforced lockdown. I can’t visit friends, neighbours, or family. I can’t go shopping unless for essential stuff. (And who determines that?) Even then, there are certain things I know I probably can’t get…toilet paper or pasta, for example. And that’s even before we consider my massacred pension pot.

I know you’re feeling it too.

Coronavirus Global Fitzonomics

It’s frightening. We’ve been invaded by an unseen enemy, and our entire way of life is collapsing around us. Like some bad dream that you can’t wake up from.

But when you do get to the supermarket for some escapism, should you panic that there’s no pasta? Or can you substitute pasta for potatoes or rice?

When cleaning products are sold out, should you get angry? Or can you make something with vinegar and water?

And when the stock market crashes, do you curse greedy bankers and think no more of it? Or do you recognise that your pension pot has just shrunk, but you’re very relieved you hadn’t invested all of it in shares?

In each case above, the very first thought is an emotional reaction to a distressing and worrying situation. The more rational second thought happens because of home economic thinking.

The ability to constantly adapt to the speedy changes of the global environment is what home economics is all about. And that’s why it can help you adapt to a fast-moving world. It gives you this ability.

But if you want to be able to adapt, you need to understand what you’re up against.

And, in this case, it means recognising what globalization is but also what it isn’t.

What does globalization even mean?

Globalization (or ‘globalisation’ if you’re a Brit) is used in many different ways. It is misused regularly, too; especially in the media. And it’s sometimes confused with other expressions, which really doesn’t help.

There are also many different perspectives of globalisation depending on peoples’ politics.

So, I think the best way to start understanding it is to use two very different examples. These scenarios occurred because we are so interconnected: the 2008 financial crisis and the 2020 coronavirus pandemic.

1. Globalization and the 2008 Financial Crisis

The 2008 financial crisis is often the first thing to spring to mind when people think about globalisation.

FInancial Crisis Global Fitzonomics

On 15th September 2008, Lehman Brothers collapsed. Lehman Brothers was a large US investment bank that crumbled because it lost too much money by lending too much money. (Odd, that.) Lehman was a symbol of the idea that the financial market knows best. At the time, many politicians held this idea. So, Lehman’s collapse really hit home and made people question this free market idea. (Whether completely free markets exist is another question…)

Many journalists freaked out, and articles questioning the end of globalization were everywhere.

But what were they really talking about?

Did they mean:

  1. the end of the world as we know it? That is, the end of how the Planet Earth is structured and organised. Or
  2. were they talking about the end of the free market idea of the globalization project?

It wasn’t always clear if they were referring to structure or to ideology.

And frankly, it’s still not always clear. The two meanings are often mixed up in the same article.

But, back to banking…

It’s definitely changed as a result of the crisis. The regulations for banks are now pretty harsh. Some might say deservedly so.

But globalization continues in many other ways. It all depends on what people mean by ‘globalization’.

In 2020, journalists are asking once again if this is the end of globalization and our way of life. (They do like dramatic headlines.) But this time, they are asking because of the coronavirus pandemic. Which… is nothing to do with banking.

2. Globalization and the Coronavirus Pandemic

The coronavirus evolved in China. People travelling from China to other places around the world probably transmitted it as they travelled. Businesses are shutting down to halt its spread; and the world economy has…well…stopped.

But this time, it is not financial globalization that’s in question. It’s economic and social globalization. It’s the way we trade and travel that’s the issue here.

This is a different thing altogether. This time it’s not about free market ideology. In this context, globalization is more than just an idea. It’s about how we live.

This is why it’s really important to understand the context in which the term is used. Otherwise, it’s almost meaningless. That context shows us what globalization means to the writer, or speaker.

What are the causes of globalization?

We think of globalization as a pretty new concept. But it’s actually been around for a very long time.

Karl Marx Global Fitzonomics

In 1848, Karl Marx, the well-known author of ‘Capital‘ and ‘The Communist Manifesto‘, wrote “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.

Marx’s view was really clear: middle-class people need a market to buy and sell stuff. And this market will keep growing, as we demand more and more until it covers the whole planet.

Marx actually called this growth “overproduction”, not globalization. But, over a century later, his same words could now be written about some aspects of economic globalization.

It seems like everyone talks about globalization all the time.

People such as journalists, commentators, politicians, academics, business leaders, trade union reps, environmentalists…the list goes on.

It’s because BIG issues are happening everywhere. There are so many traumatic things going on all over the world.

Globalization is often named as the villain, but few people explain exactly how or why.

Er, yeah, it’s because of globalization, that.” Really?

Modern ways of communicating are partly to blame for this.

We get so much raw data about global issues, all in real time.

When I was in Afghanistan, we got far quicker information on what was happening country-wide on CNN and other news networks, than anything the Army provided. However, by the time we received information down the chain of command, it had been analysed. Which meant it was actually far more useful.

And this is part of the problem with fast communications. You get the raw facts (perhaps ‘story’ is a better word…?!) thrown at you in the ‘who can get the news out first’ contest. And the explanation? Globalization.

However, very often, there’s been next to no thoughtful analysis of events and no asking of those ‘what if..?‘ type questions because there hasn’t been time. We watch the news from across the world as events unfold in real-time.

But most people can’t analyse the stories at the same speed. A good analysis takes time. And chucking raw facts at people creates anxiety and may cause people to get nervous about many things. It can even make people angry.

Other times we experience the butterfly effect. A small change in one part of the world can affect events happening somewhere else in a big way. Changes in trade regulations are an example. Quite often, we don’t know exactly what the consequences will be, which can cause people to fear the change. (Brexit, anyone?!)

Globalization is more than mega-quick modern communications.

The things we buy have really complicated lines of supply. Think of an iPad. Apple buys components from all over the world. The firm then ships them to China (or Taiwan) to build the iPads. The new iPads are then shipped directly to retail customers around the world. But when selling to retail stores, Apple distributes from its warehouse in California, in the US.

When you think about it, there are so many things we buy that are not made and shipped from one place. The logistics span the globe.

Technology is global in nature, both using it and making it. It is the result of evolution. Globalisation is not due to one simple reason or cause. And, likewise, there is more than one effect too.

What are the effects of globalization?

Whether we like it or not, we feel the effects of globalization every day. These effects are both good and bad.

The negative impacts of the global financial crisis in 2008 and the 2020 coronavirus really bring home how connected we all our. Businesses are closing, people are losing their livelihoods, and pension pots are dwindling all over the world.

But aside from these crises, many people worry about losing their jobs to technology or to firms manufacturing in other countries abroad.

Global trade Fitzonomics

For example, think of that Apple supply line. Some people in the US are concerned that Apple is employing Chinese citizens and not Americans. It’s said that making iPads is a job Americans should have in America, not Chinese in China. Apple is an American company, after all.

There are also worries about the impact all this shifting of cargo has on the environment. Planes, trains and automobiles are all used A LOT to move goods around the globe. Most of them produce emissions.

But this is very much a first-world problem.

Many people in parts of Africa, Latin America and Asia are in dire poverty.

Lots of people live on less than $1 per day. There is a huge gap in wealth between rich and poor countries. And it’s growing.

Globalization is often said to be the cause of poverty and inequality. But this is quite naive. In reality, these issues have many causes. And most of them are more complicated than they’re made out to be.

Globalization results in many good effects, often overlooked.

These are some of them:

  1. International trade helps countries grow and prosper far more quickly than they would have done without it.
  2. Exporting goods to other countries can grow a country’s wealth. Much of Asia is far better off than it was, thanks to this.
  3. Many people now live longer and enjoy a higher standard of living. Often in the West, we think of workers in Eastern factories as being exploited. But for many over there, working in a factory is a better option than staying on a farm and growing rice or another crop. This is a similar situation to the UK during the Industrial Revolution of the early 19th Century.
  4. Thanks to modern communications, people no longer feel as isolated and cut off from the rest of the world. This is true globally. Many in Africa and elsewhere now have access to finance via their mobile phones. When my husband travels abroad, I can speak to him wherever he is. (Cheaply too.)
  5. Lots of people in developing countries now have access to information and knowledge that even their wealthiest people didn’t have years ago.
  6. Public pressure on organisations is now global. This can be a force for good.

It’s often forgotten that when there are downsides to globalization, there are also upsides too

As in all other walks of life, trade-offs occur.

Milk Global Fitzonomics

For example:

  • In 1992, Jamaica allowed the US to sell American milk there. The new lower-priced competition hurt local dairy farmers, BUT it meant that local children could get milk easily and cheaply. This helped them to grow up healthier and better nourished.
  • New foreign firms can take away trade from state-owned organisations and businesses. However, new competition can result in the introduction of new technologies, the creation of new markets and the formation of new industries. Just like Uber and Deliveroo!

As with most things, there are trade-offs. By this, I mean pros and cons. Globalization is no different. Those who are scared of it often forget about or don’t know about, its benefits. But those who encourage it can also forget its downsides.

Different views of globalization

This shows that there are different views about globalization. This will not be a surprise to most readers!

Some people think it’s happening too fast, and it’s leaving some people behind. Other people think it’s happening too slowly and want to benefit more from it.

However, there are two main viewpoints that I’m going to highlight here: Economist Peter Dicken calls these hyperglobalists and sceptical internationalists. I like these descriptions as they’re pretty spot-on, so I’ll use them below.

1. Hyperglobalists believe we live in a borderless world where, effectively, nation-states no longer exist. People and cultures are all mixed up. Global corporations make identical goods for people to buy and consume. And from all over the world, knowledge and resources are pooled together. Effectively, they try to make the case that the ‘world is flat and borderless‘.

This is a very extreme position! It’s also a myth. It doesn’t exist now and is really unlikely to exist anytime soon.

However, this borderless view is held by many on the Left and Right of the political spectrum

XR Global Fitzonomics
  • On the left: anti-globalizers think globalization is a BIG problem. They think markets are bad because they can make people unequal. All globalization does is to make this happen faster and spread it further. Many on the left think it also destroys our environment. Some extremists think globalization should be avoided at all costs. They say we should return to being local like we used to be before the industrial revolution.
  • On the right: neo-liberal pro-globalizers say that globalization will benefit everybody and that markets should be left alone to do their thing. Globalization will solve inequalities, not make them worse.

I think what should be noted here is that, despite all the rhetoric on social media, neither side wants inequality. Where they’re different is in their opinion of how to reduce it. One side thinks globalization will do that, the other side thinks it won’t. Whichever view ‘flat earthers’ hold, it’s well-intended.

2. Sceptical internationalists say that globalization is not new. In fact, the world economy was more open and more united before The Great War of 1914-1918.

Before the war, trade, investment, and people moved easily between different countries. This movement was not seen again until the late 20th Century. And even now, the percentage of people moving across borders is less than it was before the war.

Sceptical internationalists say we don’t have a globalised world. We have an international economy. And the two are different.

Geography is still important

Whatever you believe, the world has definitely changed over the last few decades. We’re more connected than we’ve ever been. And company supply lines are changing all the time as technology improves.

We were definitely pretty integrated before the Great War. However, the integration was mainly through trade between independent companies, each based in a different location, and via movements of money. Now it’s completely normal to have global supply chains, worldwide distribution networks, and foreign bank accounts. And all within the same company!

Global integration Fitzonomics

Much of the time, the figures used in trade and investment data don’t consider this aspect. The data only reports the amount of trading happening. It doesn’t consider how the trade happens. Firms and industries trade between themselves and each other – they are geographically spread out all over the world.

There have also been HUGE changes to financial markets. Money moves around the world at lightning speed. And this has a big effect on national economies. Money moves in and out of countries before governments can react.

Just think about the coronavirus-induced global stock market crash, for example. And some countries rely on the oil price. In Russia, for example, if the oil price is low, the Government doesn’t receive as much cash as it would if the oil price is high.

A global economy is far more than just trading abroad a lot. It’s about a whole number of activities and processes. There is no one single cause or reason for globalization. Not even technology. Technology may allow the processes in place to happen, but it doesn’t cause them.

So then, what is globalization?

It’s the closer integration of the countries and people. It is breaking down the barriers to the flow of goods, money, knowledge, skills and people from country to country. And it’s made easier by cheaper transport and faster methods of communication.

At least, that’s my definition. There are many others along the same lines, but there’s no one definitive version, even between economists.

Globalizing forces exist, but we don’t live in a completely globalized world. And we probably never will do that. Globalization is not an end in itself but a set of processes. And these processes are constantly changing the amount of interconnection between different parts of the world.

The world is not borderless or flat. Corporations do not rule the world, and globalization is neither all good nor all bad. But, it will impact different people in different ways at different times.

Globalization is an evolution. It was never deliberately started, and it can’t be deliberately stopped. But if we’re going to flourish from it, we need to be able to manage the changes it brings.

Globalisation is a remarkable phenomenon

We need to embrace it and learn to live with it. It’s happening. Anything else will be highly stressful!

And that’s where home economic thinking comes in. (It’s always there!)

  • Home economics doesn’t only teach you how to apply skills. It teaches you why you apply skills in a certain way. You use principles to make decisions, not hard and fast rules. This gives you the flexibility to adapt and get the outcome you want.
  • The weather has ruined the global wheat crop, leading to a supply shortage…and expensive pasta? Replace the carb with another, or even cannellini beans.
  • Viral epidemic leading to no hand sanitiser on the shelves? Know that soap can kill some viruses just as well. And it’s better for the budget.
  • Fixed-rate mortgage or tracker? Understand the bank’s betting you can’t manage your own financial risk.

You learn to question everything you see and hear. You weigh up the evidence for yourself, rather than relying on newspaper hacks and others with their own agendas.

Only then can you do what’s best for you.

Home economics encourages you to learn and to constantly adapt to change. It lets you make informed decisions and think critically about issues. Above all, using principles empowers you to flourish in a fast-changing world.

It allows you to solve everyday problems in the best possible way.

The bottom line…

Nobel Prize winner Joseph Stiglitz concludes far better than I can:

An engaged and educated citizenry can understand how to make globalization work, or at least work better, and can demand that their political leaders shape globalization accordingly.

Joseph Stiglitz

Home economics empowers exactly that type of person.

Globalization Fitzonomics

Lead the change. Don’t let it lead you.

Globalization and home economics? Like gin and tonic.

What do you think about globalization? Do you get stressed out about it? Why? What do you think is great about it? I’d love to know.

Related content about economics :

2 thoughts on “Globalization and…home economics…?!”

  1. It will be fascinating to see the long-term impacts of Covid-19 on globalisation. I wouldn’t be surprised if we see a retreat to more insular policies.

    • Hi Mike! I agree – it certainly looks like it’s going that way. People are so fearful right now – it’ll take a strong government to go against the status quo.


Leave a comment

Share this