“Globalisation is all those processes by which peoples of the world are incorporated into a single world society.” (Albrow, Martin et al., 1990.) Globalisation has many aspects but its main goal is the expansion of economic, social and cultural ties between countries through the spread of the capitalist philosophy. (Biz/ed, 2007) This essay talks about globalisation and the effect it has had on society. History
Though several people believe that globalisation has taken place over the past few decades German historical economist Andre Gunder Frank believes that a form of globalisation began with the trade links between Sumer and the Indus Valley Civilisation in the third millennium B.C.E. (Frank, Andre Gunder, 1998) The Silk Road connected China to European countries and the Spice Route connected South East Asian countries like Vietnam, Cambodia and India to Europe. (Lewis, David et al., 2009). In the 16th and 17th century the Portuguese, Spanish, Dutch and the British led the way in discovering new countries by new and easier sea routes which in turn led to the establishment of the Dutch East India Company and the British East India Company which further developed trade between Asia and the Western European Countries. Christopher Columbus in his search for India discovered America. The ‘Age of Discovery’ made the world a smaller place. In the 19th century, steamships reduced the cost of international trade and railroads made inland transport cheaper. The transport revolution occurred between 1820 and 1850. (O’Rourke, Kevin H et al., 2000.) After the Second World War institutions like the General Agreement on Tariffs and Trade (GATT) and World Trade Organisations (WTO) fuelled trade further. Advances in aviation in the 1970s have made it possible to travel around the world in a single day in comparison to the weeks and months it use to take 100 years ago. Development of low cost communication and the internet in the past few decades have also contributed to the spread of Globalisation. Globalisation: A Boon or Bane
Improvements in transportation and communication after the 20th century have made international business grow rapidly. They have led to the formation of Multinational Corporations which have markets and production operations in different countries around the world. These MNCs provide job opportunities and are responsible for producing prosperity. The outsourcing of goods, services and products to oversees countries helps in developing technology. Development of technology and the continuous upgrade of products help firms to compete with other firms which in turn keeps the prices of products low. Though MNCs may have their advantages wealth created by them is unequally distributed among the society. Outsourcing the manufacture of goods and services to less developed countries allows firms to exploit people as they do not have to offer them the same wages they offer employees in developed countries. Weak protection in these countries for children leads to their exploitation as well and are forced to work for little or no pay at all. The gap between the rich and the poor becomes more apparent and there is only a small percentage of middle class. This results into market failures which are highly destabilizing to a government, particularly one that is based on the electoral process. Trade agreements like GATT and WTO have fostered trade between countries since the end of the Second World War. “A FTZ is an area within which goods may be landed, handled, manufactured or reconfigured and exported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to prevailing customs duties. Free trade zones are organised among major seaports, international airports and national frontiers- areas with geographic advantages for trade.” (Britannica) Today policies like Free Trade Zones (FTZ) have allowed a country to import goods which can be made cheaper in other countries and export goods which are cheaper to make in their country. Trade among countries in Asia, Europe and America has fuelled economic expansion. The expansion of trade has also had negative effects. The United Nations in 2010 estimated the global drug trade to be in excess of $320 billion a year and estimates there are 50 million regular users of drugs. (BBC, n.d.) In addition to the trade of drugs the international trade of endangered species and use of their parts in traditional medicine is also one of the negative impacts of trade. (Reuters, 2009). The World Wide Web has had a tremendous impact on Globalisation. The use of the internet, email, video conferencing services for business and personal use has made it easy to communicate with people. Social networks like Facebook, Twitter and MySpace have helped people keep in touch with their loved ones. Services like DHL, FedEx and nationwide postal services have made it easy to send letters and packages all across the world. The development of low cost telecommunication services has made the world a smaller place. Globalisation has made tourism a popular leisure activity. In 2011 there were 983 million international tourist arrivals worldwide. (UNWTO 2012) Tourism is vital for any country. Some countries like South Africa, Botswana, Kenya and Nepal establish economies that revolve around the business of tourism. Based on information from countries with data available tourism’s contribution to the Gross domestic product and employment of the country is 5% and 6-7% respectively. (UNWTO 2012) Today sushi is available in America and McDonalds in Japan. Globalisation has affected the cultures of different societies starting with religious movements like Christianity, Hinduism, Islam and Buddhism. Music from the Western countries spread across the world through channels like MTV. Cowen, Tyler (2003) believes that, ‘Though Cultural globalisation has increased cross-cultural contacts it has been accompanied by a decrease in the uniqueness of once isolated communities.’ Because of cultural globalisation today, people have lost their own unique identity. Due to globalisation the concept of one’s culture is in the period of change. Globalisation has led to the emergence of world politics and the establishment of institutions like the European Union (EU), WTO, G8, International Criminal Court, etc. These institutions have been established to protect the economic and political welfare of the countries in the world. Institutions like the International Monetary Fund (IMF) and the World Bank help the third world nations in their developmental efforts. Though these institutions are created to safeguard the rights of the people the major criticism about these institutions are that the voices of small countries are not heard. As developed countries like the US, UK and Germany have a large say in world economics the smaller, less developed countries tend to get bullied which result in the rich nations becoming richer and the poorer countries becoming poorer. Important agencies like the World Health Organisation (WHO), UNICEF have been established to improve global health. Although these organisations do a lot of good work around the world, globalisation has led to the spread of many deadly infectious diseases like AIDS/HIV, Tuberculosis and most recently the H1N1 virus. Sport has been one of the biggest benefactors of globalisation. An estimated 4.8 billion people watched the Summer Olympic Games in London this year. (Statista, 2012) The competition in sports and the number of people playing a sport for leisure or for exercise has increased tremendously. Globalisation has had a very bad effect on the environment. Many factories are built in less developed countries which don’t have the proper laws or protective mechanisms in place to protect the environment. Firms take advantage of this situation as they know they can find loopholes in the current laws or can bribe their way out of it. Though globalisation may have a good effect on the economics of place it does harm to its environment. Conclusion
Criticism on globalisation is generally based on its impact on the environment and human costs. As explained above globalisation increases the gap between the rich and the poor, breaks down democracy, has cultural effects, spreads new diseases and deteriorates the environment and also lead to the colonisation of many countries in the 17th and 18th century. Having said that globalisation has contributed a lot in making the world a better and much easier place to live in. It has led to economic growth, expansion, development and produced prosperity. Though prosperity has not been equally distributed among these countries one can argue that the less developed countries may have been worse off if it wasn’t for globalisation. People working in the manufacturing companies may be earning more now than what they use to working in their fields. Paul Krugman (1997) believes that the growth of manufacturing and of the penumbra of other jobs that the new export sector creates has a ripple effect throughout the economy. The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise. When this process has gone on for long enough-say, in South Korea or Taiwan wages start to approach what an American teenager can earn at McDonald’s and people are no longer eager to live on garbage dumps. Though Economic instability has increased during the period of globalisation- evident with the financial crisis since 1980s, all the successful developing countries after the Second World War initially succeeded through nationalistic policies, using protection, subsidies and other forms of government intervention. According to Thomas Friedman it is necessary for countries to adopt a set of policies like privatization of state-owned enterprises, maintaining low inflation, reduce government bureaucracy and corruption, deregulate foreign investment and privatize pensions for them to fit into the world of globalisation. Importance of strategic, rather than unconditional integration with the global economy is seen today with the recent success stories of China and India. (Chang, Ha-Joon, 2007). Globalisation has had its ups and downs when it comes to what its main objective is and it may take many more years to achieve it. Globalisation may not have affected everyone for the good but it is our responsibility in the coming years to see that it does. References
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