MDP Essay- Globalisation PDF

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Since the early 1990s, globalization has triggered a storm of controversy among social activists, intellectuals, business leaders, policy makers and politicians. The debate over globalization is often passionate and, sometimes, even violent. Critics argue that globalization creates inequalities, los...

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Since the early 1990s, globalization has triggered a storm of controversy among social activists, intellectuals, business leaders, policy makers and politicians. The debate over globalization is often passionate and, sometimes, even violent. Critics argue that globalization creates inequalities, loss of jobs, environmental degradation, and is detrimental to all cultures (Stiglitz, 2002)

Globalisation is currently a popular and controversial issue. In recent decades, globalisation has been a contentious topic not only for businesses but also the general public and government. There are a many differing views regarding and attitudes towards the topic. It is true to say that globalisation has brought about countless benefits, yet it would be wrong to ignore the fact that damage and detrimental effects aren’t brought about via the process, especially for those living in developing countries. What most certainly cannot be denied is that in today’s constantly evolving and connected world, globalisation is happening. Regardless of whether people perceive it to be a good thing or not, globalisation surrounds us. One such example is that of a supermarket, when looking at the items that are available, it is likely that a fair few of products on offer are produced and imported from another nation. In 2017, it was revealed that only 48.68% of food in the UK was actually produced there (House of Lords, 2017). The statistic supports just how present globalisation is, not only across the world, but also in the UK. This essay will explore the true meaning of globalisation and what has caused it, the positive attributes, but also an insight into the negative impacts that it can have. How is it then that globalisation happened in the first place? For many decades there were barriers of globalisation as there was limited free trade policies. Since the end of the second world war agreements were made on the reduction of tariffs fees which had acted as a barrier to trade. Organisations such as the World Trade Organisation promoted this idea of free trade between countries. This increase of tariff free trade made it much easier for countries to trade on a global scale (Frankel, 1999 pg.379). There had also been a huge advancement in technology (Mazilu, 2010, pg.193). With the evolution of technology e-commerce had and still continues to enable organisations to trade globally online. Another contributing factor of globalisation is the major improvement on transport and infrastructure over the years which has made in easier to trade globally, such as faster and larger planes allows trade over further distances to be easier and cheaper to do so (Garrett, 2000, pg.942). Containerisation is a good example how advances in transport has encouraged globalisation, it allows for vast quantities of goods to be shipped by sea at extremely low costs for businesses allowing organisations to

transport their goods to another country and a lower cost. Several factors have contributed to the growth of globalisation which is now a commonly spoken about issue. Globalization typically refers to the process by which different economies and societies become more closely integrated, and concurrent with increasing worldwide globalization, there has been much research into its consequences” (Nilson, Theresse, 2010). The term globalisation refers to the removal of barriers to economic exchanges between countries allowing them to trade freely ((Di Mauro, 2008). The eradication these trade barriers had led to improve communications between organisations from different countries. Globalisation is not a new phenomenon (World Trade Organisation, 2008). However, the process of globalisation has developed quickly in recent times due to advancements in technology which has led to the transferring of information to be a swift process. The advancement of internet technology has had a pivotal impact on globalisation as said by Manfred B. Steger ‘The Internet, in particular, has assumed a pivotal function in facilitating globalization’ (Steger, 2009). This is due to the internet increasing the quantity of information available for business, to make informed choices about major decision e.g. when to launch a product in regard to a competitor, in another country, releasing a potential substitute. The evolution of internet technology has allowed for organisations, that the global market was not accessible to before, to trade with institutions around the world. Due to globalisation and an increasingly interconnected world, many firms attempt to expand their sales into foreign markets. (Hollensen, 2012). Globalisation therefore not only affects large multinational firms but also pushing smaller organisations into the global economy (Di Mauro, 2008). Globalisation therefore is the turning of the world from isolated economies to what can be called an integrated economy. With more and more trading taking place, more and more wealth is created which has affected lives all around the world. Globalisation allows for the process of expanding business operations at a global level. Due to technological advancements, companies can more than ever compete in the international market. Globalisation has not only increased traditional international trade of goods and services but the exchange of capital, technology and people. (Rajan, 2008, pg.65). Foreign direct investment is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased (Duce, 2003, pg.2). Globalisation has encouraged FDI inflows from western countries into developing countries which has allowed them to open borders to foreign capital. For developing countries, like

Japan and South Korea, this is a huge benefit as it allows them to increase job opportunities as more jobs are created (Lee, 2006, pg.6). With more people working, less people are left unemployed which significantly improves the of living standards within that country. Thompson backs this point by stating “one of the great benefits of globalization is the manner in which it increases wage rates and purchasing power in previously low-income countries” (Thompson, 2007, pg.2).Therefore, it can be seen that economically globalisation has helped in the reduction of extreme poverty in developing countries and in simple terms allowed these developing countries to catch up in the industrialised world. For western countries globalisation has also led to increased trade, for the UK this hugely beneficial as it allows them to specialise in goods where they have comparative advantage such as electrical machinery and mineral fuels (Crafts, Thomas 1986). This comparative advantage allows the UK to produce better quality products as a cheaper price than other countries, which enables high exports from the UK which could positively impact the GDP per capita within the UK. Therefore, it can be seen that globalisation has had several positive economic impacts in different countries around the world. Over the years there has been a significant increase in labour migration. Labour migration benefits both the worker and the recipient country. For example, if a country experiences high unemployment, through globalization there is the possibility to look elsewhere for a job. This process of labour migration helps tackle the issue of geographical inequality, that is highly seen in the EU with many eastern European workers migrating west (Dustmann, Fabbri 2003 pg.11). Globalisation, through making trade between countries simpler and more efficient has been a contributing factor to the increase in competition. Increased competition is good for both the economy and consumers as it results in goods and services being provided at competitive prices. Competition encourages companies to be more efficient and productive as they are aware that their competitors are seeking way to be more cost effective, which in turn leads to the offering of higher quality goods and better services at much lower prices. Globalisation has several benefits and has been a major contributing factor towards making the world and better and more effective place. Although Globalization has many benefits, it is a very controversial issue when it comes to the negative impacts it has on society. In an economic sense, it fuels inequality and a loss of jobs in high income countries. Western businesses take advantage of cheap labour in other nations and choose to produce their goods in these locations via contractors. An example of this is in Uganda, where the minimum wage rate is $95 per annum (Uganda Minimum Wage,

2019). In comparison, the US minimum wage is $15,080. Due to this exploitation, workers struggle to find labour intensive work within high income countries as their wage demands are much greater. More and more companies now utilise globalisation to maximise profit and therefore cut the workforce within their country. This not only creates job loss, but also inequality in the fact that huge corporations continue to get bigger whilst the rest are left to suffer Lindley states that “the gap between rich and poor has become too wide, too fast” and suggests that globalisation plays a huge part in this (Lindley, 2007). Environmentally, global transport produces 14% of anthropogenic greenhouse gas emissions across the world (OECD, 2010). This number will be significally higher now with globalization only becoming more and more popular. Environmental awareness and a fight against climate change are some of the most prominent debates across the world in present times. With businesses continually transporting goods around the globe, the detrimental impact it has on the environment is clear to see. From a cultural point of view, globalisation has received major backlash in regard to the prominent world powers’ influencing traditions and ways of life in other countries. Baroud (2019), in the article for the Japan Times believes that so called “third-world countries” are defenceless to resist the perfectly branded western “culture”. This is a very valid point because the most economically well-off countries also tend to have the most influential media. Low income countries are stuck at cross-roads between “trying to negotiate a better economic standing for themselves, while hopelessly trying to maintain their cultural identity, which defined their people, generation after generation throughout history”. This statement perfectly summarises the challenges that less powerful countries face whilst being exploited via globalisation. In extreme cases, the process has been linked to terrorism across the Globe. (Lutz, 2015). The idea that particular groups within a nation are not in agreement with changes that globalisation could bring about signifies that unrest can most certainly be raised. Furthermore, globalisation has actually aided terror groups in accessibility to reach far-away nations. Lutz brings up the example of 9/11. Increased communication and transport links have meant that groups can co-ordinate attacks more effectively than ever. This has also generated global insecurity as a whole. (Lutz, 2015) Although globalisation cannot be held completely responsible, it is evident that its potential benefits have produced ugly consequences and in rare cases, violence.In this specific example, rebellion/terror is in relation with religion. Naturally, globalisation has the power to undermine traditional religious values with its various influences. Lutz lists Jewish extremist groups in addition to

militant Hindus in India as examples of ways that globalisation can provoke reaction (Lutz, 2015). Despite the fact that this potential violence focuses on a minority, it is still very relevant when analysing the detrimental effects of the process.

The success of globalisation has been a widely debated issue. However, many believe that globalisation will prosper in the future and can be extremely successful if done correctly with balance and more equality, “it must not be assumed that the benefits of globalisation are so obvious that opposition will simply fade away. There are undoubtedly practical limits to globalisation. There may be normative limits as well.” (Skidelsky, 2012) Globalisation has not been completely successful because there hasn’t been a wide acceptance of it, therefore it hasn’t been able to expand and improve to the maximum potential. Ultimately, increased trade is a positive thing and over-regulating it can be detrimental to economic success. Hence in future negotiations, globalisation should be embraced. Globalisation cannot be stopped; therefore, some believe that should make it functional. (Brown, 2008) The positive effects must be encouraged and improved whereas the negative impacts must be diminished in order to create a sustainable economic climate. If problems are not solved in the future with regards to freedom of trade, the risk of economic failure is great. As we fail to solve our problems globally, the international economy will start to fragment. (Skidelsky, 2012). The key to successful globalisation in the future may be to understand it more as suggested by sociologist Wallstrein, “the discourse (globalisation) is actually a huge lack of understanding of contemporary reality - deception imposed by powerful groups” (Wallerstein, 2000).Globalisation has the potential to bring many more benefits that it does now however in that globalisation must firstly be understood properly.

A key aspect to note in relation to globalisation is the fact that it can be viewed in many different ways. Perspectives are very important to consider. Therefore, although a conclusion is brought about in this essay, there truly is no right or wrong answer. Businesses thriving off the effects of globalisation will very obviously have a completely different view of the process than that of the unemployed. When weighing up the pros and cons of globalisation, it is important to try and grasp both sides of the argument.

In conclusion, since the early 1990s there has been a mixture of attitudes when it comes to globalisation. Where it has triggered a storm of controversy amongst certain groups, lots of people have seen globalisation as an opportunity to improve the lives of many. In some cases, the debate over globalisation can be passionate and sometimes even violent (although this is not a common case). Despite the many challenges that globalisation has created, overall it has made the world a better place than it otherwise would have been. Globalisation is not a passing phenomenon and is it therefore highly important to focus on learning about globalisation and how to improve with globalisation in order to eradicate poverty and generate higher standards of living for all and if the right measures are taken globalisation has huge potential to tackle inequalities, the loss of jobs, environmental degradation that critics argues globalisation created. Word count- 2265

References Baroud (2009). Globalization: a culture killer The Japan Times. Available at: https://www.japantimes.co.jp/opinion/2009/11/21/commentary/world-commentary/globalization-aculture-killer/#.XdF6MS2cb_R [Accessed 12 Nov 2019] Brown, Wallace (2008) Globalisation is what we make off it: contemporary globalisation and the future pg.42-53 Crafts, Thomas (1986). Comparative Advantage in UK Manufacturing Trade The Economic Journal, Vol.96, pg.629-655. Di Mauro (2008). Globalisation, regionalism and economic independence Cambridge University Dustmann, Fabbri (2003) The local labour market effects of immigration in the UK pg.11 Frankel (1999). Does trade cause growth? American Economic Review, pg. 89, 379-399. Garrett (2000) The causes of globalisation Yale University pg.941-945 Gurria (2008) Globalisation and rising competition challenges for the Czech economy Available at: https://www.oecd.org/economy/globalisationandrisingcompetitionchallengesfortheczecheconomy.htm [Accessed 13 Nov 2019] Hollensen (2012). Essentials of global marketing. Harlow: Pearson. House of Lords (2017). Brexit: food prices and availability. Pg. 3 https://publications.parliament.uk/pa/ld201719/ldselect/ldeucom/129/129.pdf Lee (2006) The social impact of globalisation in developing countries pg.6 Lindley (2007) Current links between globalisation and violence Journal of American Science Available at: http://www.jofamericanscience.org/journals/am-sci/0301/01-0209-lindley-am.pdf [Accessed 12 Nov 2019] Mazilu (2010) Globalisation, where? European Research Studies pg.193-199 Nilson, Theresse, (2010), Good for Living? On the Relationship between Globalization and Life Expectancy, World Development Vol. 38, No. 9, pg. 1191–1203 OECD (2010), Globalisation, Transport and the Environment, OECD Publishing Available at: https://doi.org/10.1787/9789264072916-en. [Accessed 12 Nov 2019] Rajan (2008). Economics of Globalisation - Edited by Partha Gangopadhyay and Manas Chatterji Economic Record pg.65 Skidelsky (2012) After the crash: the future of globalisation Vol.54(3) pg.7-28 Steger (2009). Globalization. Oxford University pg.17 Uganda Minimum Wage (2019). Uganda Minimum Wage - World Minimum Wage Rates 2019 Available at: https://www.minimum-wage.org/international/uganda#:~:targetText=Uganda's%20minimum%20wage %20is%206%2C000%20Ugandan%20shillings%20per%20month%20for%20all%20workers [Accessed 12 Nov 2019]. World Trade Organization. (2008). World Trade Report: Trade in a Globalizing World. Available at https://www.wto.org/english/res_e/booksp_e/ anrep_e/world_trade_report08_e.pdf. [Accessed 12 Nov 2019] World Bank (2019). Overview Available at: https://www.worldbank.org/en/topic/poverty/overview [Accessed 13 Nov. 2019]...