The notion of globalisation encompasses various different aspects of social, economic and political life. In order to answer the question of whether or not globalisation is a progressive or negative force, I must first define globalisation. Then I shall examine the impact of globalisation on the population and finally determine whether this is a positive or negative impact. There are five different aspects that I have chosen in order to define the phenomenon of globalisation. They are internationalisation, liberalisation, universilisation, westernisation, and deterritorialization. (Scholte, page 16)
Internationalisation refers to the significant increase in relations between countries. Increases in economic trade and political relations between countries have led to increased interdependency between countries, especially on an economic level. There has also been increased movement of people, capital, and ideas between countries. International relations between countries have always existed, but in today’s globalised world, these relations have become more important and more significant than ever before. Liberalisation refers to the loosening of government restrictions on movements between countries.
It is easier for individuals to move between countries, and also for money and capital to move between countries. The main component of liberalisation has been economic. There have been increasing commitments on the part of nations to adopt free trade policies and allow the free movement of capital between states. There have been significant reductions in tariffs and on foreign exchange restrictions. Capitalism has been adopted on a global level with companies competing against companies in other countries, and the increased presence of multinational corporations in many countries.
Universalisation refers to an increasing homogeniety across countries. Due to economic liberalisation and the opening up of markets to the world, the same products can be found in different countries and multinational corporations can exist in many different countries at the same time. It is the process of spreading a variety of goods, services, and ideas to all parts of the world. Countries are adopting similar policies of economic liberalisation, and increased freedom of movement of people and capital between countries.
Westernisation is a concept often associated with universalisation and it refers to the spread of western ideas and western culture to the rest of the world. These include industrial capitalism, individualism, and liberal democratic forms of government. These ideas often conflict with traditional cultures and often destroy or alter the values of these cultures. For example, the World Bank and International Monetary Fund have imposed structural adjustment programs on developing countries. These programs have a western agenda of economic liberalisation and liberal democratic government.
Deterritorialisation refers to a reduced significance of borders between nation states. This is due in large part to technological improvements that allow rapid movement across countries around the world. A country’s location is not as important as it used to be. World domination no longer exists in the form of direct colonisation of another territory, but instead exists in the form of multinational corporations and economic dominance of other countries. Globalisation encompasses all these different aspects, but the degree to which these aspects are significant and the extent to which these aspects exist are highly debateable.
I shall now examine what the impact of globalisation is on the different sectors of the population. Who are the winners and who are the losers in this process of globalisation? I will first examine the economic impact of Globalisation. Globalisation has within it primarily neoliberal economic policies. These include the reduction of trade barriers, the free flow of capital across nations, and a free market global economy free from state intervention. The theory is based on the notion that market forces lead to an efficient allocation of resources and will bring prosperity to all in the long run.
Government intervention in the economy should be minimal. There should be no restrictions on prices, wages, and exchange rates. With this neoliberal economic framework in place for the global market, I will now examine what effect this would have on the world economy. If we consider what has happened up to now, the economic effect of globalisation has been mixed. Some groups have benefited while others have suffered. Firstly, the net effect on world economic growth has been insignificant. World economic growth from 1950-1975 was 4. % and growth from 1975-1999 was 3. 1% (Sandbrook, page 18). This leads to the conclusion that globalisation is not a key determinant of economic growth. On the whole, globalisation has not led to large increases growth, implying that the effect of globalisation has indeed been very mixed. However, economic theory suggests that if there is free trade and free competition between countries, in the long run there will be a significant positive effect on growth caused by globalisation. The theory of comparative advantage is what leads economists to this conclusion.
One of the negative effects of economic liberalisation has been the the increase in economic inequality within countries, both of developed and developing countries. In the case of developed countries, the economic inequality between rich and poor has significantly increased. This is due to the fact that labor costs tend to be high in developed countries; so many companies have chosen to shift to less developed countries where labor costs are cheaper. This has led to a decrease in demand for labor in developed countries causing the wages in the countries to drop, hence creating a wider gap between the rich and poor.
While corporations are making more money that before due to cheaper overseas labor, workers in developed nations are making less money. In the case of developing countries, the there has been an increase in income inequality, but it has not been as substantial as in developed countries. This is due in part to that fact that income inequality was already very high in developing countries so there is not as much room for an increase in income inequality. The existence of multinational corporations in developing countries has led to a higher demand for labor in these countries, which would contribute to an increase in wages.
However, due to the fact that most multinationals are more capital intensive (a high capital to labor ratio) than their domestic competitors, multinationals do not need to hire as many workers as a domestic firm would. If the multinational replaces the domestic firm as the prime employer of labor, the overall demand for labor drops, hence lowering the wage. The result therefore has been mixed. There has been an increase in income inequality, but it has not been substantial. (Sandbrook, page 19) Another effect of globalization on developing countries due to economic liberalization has been the flow of technology into these countries.
Developing countries have benefited because they have acquired technology from developed countries which has allowed their economies to become more productive. However, as I mentioned earlier the increased technology means that less labor is required to produce goods so there is a drop in labor demand, and hence wages. On the whole, the inflow of technology into developing countries has been beneficial because it has contributed to higher levels of economic growth and productivity in these countries. Multinational corporations that have shifted production abroad have tended to be companies that require cheap unskilled labor.
Many jobs have been created in these developing countries, but these jobs have been largely unskilled, leaving low prospects for growth as a result of these new jobs. Also, most of these jobs are manufacturing jobs which tend to have high social costs such as pollution. Developing countries do not have as many pollution and environmental controls as developed countries, so globalization has been detrimental to the environment on the whole. Recently, there has been an outflow of skilled labor from developed countries to developing countries, an example being call centers being set up in India. ? ]Multinational corporations that have shifted production abroad have tended to be companies that require cheap unskilled labor. Economic liberalization on the whole has had mixed results. For developed countries, it has been beneficial to corporations because they are able to produce their goods much cheaper by producing abroad. This has led to increases in GDP and increases in productivity. Consumer goods in developed countries are cheaper as a result. Those who have suffered in developed countries have primarily been unskilled workers, whose wages have gone down.
Some skilled workers have also suffered, but not to the same extent. Workers in developed countries have been forced to compete for jobs with workers in developing countries, and because of the much lower wage rate in developing countries, workers in developed countries have lost out. For developing countries, economic liberalization has been mixed as well. The benefits have been increased foreign investment into the country, increased flow of technology into the countries, and higher economic growth rates as a result.
On the other hand, income inequality has worsened, most of the jobs that have come into these countries leave little room for future growth, and there have been significant environmental costs. Economic theory suggests that in the long run, everyone will benefit from economic liberalization, but at the moment this is not the case. One of the positive effects of increased economic trade between countries is the idea that if countries have significant relations with each other, there will be a lower chance of war happening.
If two countries trade a lot with each other, they become economically interdependent on each other. This means that if there was a war between these two countries, they would have to give up all the economic benefits that they gain from trading with one another. This leads to the conclusion that was is much less likely if countries are economically interdependent because countries have a lot to lose by going to war. An example is the European Union. Because of high trade between the countries of Europe, there has been increased cooperation between European countries on a level higher than ever before.
These countries now share a common currency and they all receive massive economic benefits from trading with each other. Because of economic interests, the chance of a war happening between two EU member countries is very low. It is in the best interests of countries to cooperate with each other, because countries can achieve a lot more for themselves on an economic level if they are cooperating with instead of fighting against one another. The United Nations is an organisation that has similar ideals. They believe that they can achieve peace through cooperation and global intervention.
They focus a lot of efforts to develop undeveloped countries with the hope that these countries can become a part of the international community and become a significant player in the global economy. Organisations such as the World Trade Organisation are committed to free trade for the global economy. The theory being that free trade is good for all countries, and it increases the prospects of peace in the country is they have economic interests in other countries. International organisations are on the whole committed to increasing economic relations between countries, and preserving peace etween countries, which is key component to globalisation. One important aspect to consider is that most of these international organisations are run by the rich western countries. Although all countries are involved with these organisations, the power of [? ]these organisations lies in the west. One could argue that in these organisations are simply tools of the western countries in order to speed up the process of globalisation for their own economic ends. This is probably true to an extent, but even if it is the case, the poor countries do get developed in the process so it is not completely a bad thing.
Globalisation has to some degree reduced the sovereignty of nation states. Many [? ]countries, especially developing countries are forced to abide by the laws of international organisations if they are contradictory to their own laws. For example, many countries are forced to adopt free trade policies in order to make the global economy fair and competitive. More power is in the hands of multinational corporations and international organisations than ever before. This phenomenon contributes to the process of globalisation in the sense that there are laws that apply to the whole world.
If there is a global market, there need to be laws that regulate the global market and they have to be enforceable on a global level. (Bamyeh, page 4) for example in countries like India Globalization has affected most the earning and the living stands of people in the urban areas. India’s real culture is still preserved in rural life. New advancement of technology has not much influence in rural areas. People still prefer to wear dresses of old fashion and celebrate festivals in old styles. Folk dances and folk songs are still popular among villagers. Culture is still untouched and unaffected by western influence.
Globalization has no impact on rural life as standards of living are suboptimal but migration of people is taking place and poor people are moving to urban areas in search of employment. The Globalization impact has more on the urban areas because of high stander of living. In work places in industries employees takes their job for granted after graduation. Young graduates enter the work force in large number and earns higher salaries which discourages the students from further studies. It’s the greed that involves in the society and within culture to work hard to earn more. In addition the society’s people become more analytical and ell informed. One of the phenomenon’s of globalisation has been the westernisation of many traditional cultures. There has been a significant outflow of western goods, ideas, and culture into the rest of the world, but there has not been a significant outflow of eastern goods, ideas, and cultures into the western world. The westernisation of many countries has a had mixed effects. On the positive side, the exchange of culture creates for more understanding, diversity, and harmony between different cultures. People are more aware of other cultures, making them more intelligent and decreasing the chance of conflict between cultures.
On the negative side, the outflow western culture into traditional societies has in some cases created a lot of resentment towards western countries and cultures. The values of traditional cultures often get changed or lost altogether through westernisation. For example, in India, Valentine’s Day was recently celebrated. Valentine’s Day is a part of western culture and it has flowed into other traditional cultures like Indian culture. A Mumbai based Hindu nationalist party known as Shiv Sena launched a massive campaign against Valentine’s day proclaiming that it was not a part of Indian culture and should not be celebrated.
There were protests, burning of Valentine’s Day cards, and it had a significant impact on the Valentine’s Day celebration. This example demonstrates that there is a lot of opposition in traditional cultures towards western culture. (Sandbrook, page 53) Another example is the September 11th attacks on the World Trade Center. These attacks were directed against the USA, and were the product of a lot of resentment towards the USA by some Muslims. They were against the USA interfering in Middle East and imposing their western consumerist capitalist culture on these societies.
The World Trade centers are a symbol of world economic trade and the globalised economy, and these attacks are very much a response to the USA’s increasing power in the global economy. Although these attacks were carried out by a minority, there is however a large number of people living in the Islamic world who are fiercely opposed to the western capitalist culture. In Iraq today, there are attacks continual attacks on American troops carried out by people against the American presence in Iraq. They do not want Iraq to become a country that adopts the American ideals of capitalism and democracy. They do not ant Iraq to become a place where American corporate interests are present. This is another example of resistance to western cultural ideals in traditional societies. One of the major issues surrounding cultural exchanges as a result of globalisation has been the lack of cultural ideals flowing from tradional eastern societies to the western societies. Today, people from the east know far about western culture than people from the west know about eastern culture. There are western multinationals and western consumer goods in eastern countries but not vice versa. One of the reasons for this could be economic.
Because the western countries are rich, and have initiated the process of globalisation, in order for eastern countries to benefit from globalisation, they have to adapt to the western ideals, because most of the money lies in the west. This leads to question of whether or not globalisation is a purely western phenomenon. Globalisation theory is clearly a product of western liberal thought and ideas of globalisation have for the most part come out from the west. The eastern countries, because they are much less powerful than their western counterparts, have been forced to adapt to globalisation and western ideas.
Iraq is clear example of this. The USA wants to impose western ideals of democracy, liberalism, and capitalism in Iraq and that is exactly what they are planning to do. Despite resistance to the USA in Iraq, the resistance is not big enough to defeat US forces or make them leave the country. If the reason for westernisation has to do with economic, political, and military power lying in the hands of the west, then it is possible that in future, if certain eastern countries become powerful, then western countries will have to adapt to the cultures of powerful eastern countries.
In conclusion, globalisation has both benefits and drawbacks. On the economic side of globalisation the benefits include higher GDP for both poor and rich countries. They also include foreign investment into poor countries giving them a greater chance to develop. The economic drawbacks include increased inequality of income; that is to say that there is wider gap between the rich and poor of country and this is true for both developed and developing countries. It is especially the case in developed countries and this has aused a lot of resistance to globalisation within developed countries by the working and middle classes. A positive effect of globalisation which has been a result of increased economic cooperation is the prospect of peace between countries. War between two countries is much less likely if they are economically interdependent. The costs of going to war are much higher because international trade would be lost. Finally, there has been a cultural exchange as a result of globalisation. It has mostly been an outflow of culture from the west to the rest of the world.
This has positive and negative effects as it does create for better awareness, understanding, and tolerance of other cultures, it has also eroded many tradional cultural values and this has caused resistance to globalisation. Lastly, globalisation has reduced the power of nation states and increased the power of international organisations and multinational corporations. Globalisation has positive and negative effects, but one certainty is that globalisation does exist and it remains to be seen how much further it will go.