What is globalisation?
	By: Jeremy Brecher and Tim Costello Adapted from: Global Village or Global Pillage

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Modern capitalism developed within a system of nation-states. Trade and investment between countries were important, but they were usually conducted by companies rooted in one home country. Some companies had large holdings in foreign countries in which ultimate control remained "at home". National governments controlled treasury departments, central banks, trade and labour policies, taxation, commercial law and other key economic institutions and thereby shaped their national economies.

This system of nation-based economies is rapidly evolving towards a global economy. Computer, communication, and transportation technologies have lessened distance as a barrier, making possible the co-ordination of production and commerce on a global scale. Corporations are globalizing not only to reduce production costs, but also to expand markets, evade taxes, acquire knowledge and resources, and protect themselves against currency fluctuations and other risks.

Three hundred companies now own an estimated one-quarter of the productive assets of the world. Of the top 100 economies in the world, 47 are corporations - each with more wealth than 130 countries. Their interests are global. They have formed complex alliances which means that they cooperate with each other as well as compete.

Production increasingly takes place in a global factory where different phases of production are performed in different countries. When an American buys a Pontiac Le Mans from General Motors for 10 000 Dollars, for example, 3 000 Dollars goes to South Korea for routine labour and assembly operations, 1,750 Dollars to Japan for advanced components, 750 Dollars to West Germany for styling and design engineering, 400 Dollars to Taiwan, Singapore and Japan for small components, 250 Dollars to Britain for marketing services and advertising, and about 50 Dollars to Ireland and Barbados for data processing.

International economic institutions like the IMF (International Monetary Fund), World Bank, the European Union and WTO (World Trade Organisation) have developed powers formerly reserved for nation states. National governments have become less and less able to control their own economies.

Globalisation has expanded the wealth and power of a few hundred global corporations. But for the majority of people in most parts of world, the era of globalisation has had its downsides. They have experienced rising unemployment, falling real incomes, mass layoffs, cutbacks in social services, deteriorating working conditions, accelerating destruction of the environment, and loss of democratic control over their societies and governments.

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