Not Applicable
Globalization and Anti-Globalization:
An Indian Perspective
If one is going to talk about globalization, the term globalization must be defined. That’s the easy part. Globalization is defined as free cross-border flow of goods, services, capital, labour, information, ideas, intellectual property. Everything in fact. Defined thus, globalization is more than mere trade reform. Globalization has a descriptive component, as well as a prescriptive one, with the latter more important than the former. The former is simply a factual statement. Over a period of time, globalization has increased in importance and countries have become less insular. It is possible to argue that one encountered such globalization also in the 19th century. There are however two differences between earlier phases of globalization and the present one. First, the speed of change is faster. Second, because most flows (including capital) are private ones, governments have become less powerful in controlling or determining the shape of globalization.
However, there is a prescriptive element to globalization as well. The cross-country empirical evidence is fairly robust that more open economies tend to perform better than more insulated ones. Borders are after all artificial boundaries, created by governments. They are irrelevant for purposes of efficient resource allocation. The logic of Adam Smith’s specialization and division of labour does not become any less compelling because artificial national boundaries have been erected. Here is a quote from Wealth of Nations. “By means of glasses, hotbeds and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?” The point about
An Indian Perspective
If one is going to talk about globalization, the term globalization must be defined. That’s the easy part. Globalization is defined as free cross-border flow of goods, services, capital, labour, information, ideas, intellectual property. Everything in fact. Defined thus, globalization is more than mere trade reform. Globalization has a descriptive component, as well as a prescriptive one, with the latter more important than the former. The former is simply a factual statement. Over a period of time, globalization has increased in importance and countries have become less insular. It is possible to argue that one encountered such globalization also in the 19th century. There are however two differences between earlier phases of globalization and the present one. First, the speed of change is faster. Second, because most flows (including capital) are private ones, governments have become less powerful in controlling or determining the shape of globalization.
However, there is a prescriptive element to globalization as well. The cross-country empirical evidence is fairly robust that more open economies tend to perform better than more insulated ones. Borders are after all artificial boundaries, created by governments. They are irrelevant for purposes of efficient resource allocation. The logic of Adam Smith’s specialization and division of labour does not become any less compelling because artificial national boundaries have been erected. Here is a quote from Wealth of Nations. “By means of glasses, hotbeds and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?” The point about