Globalisation And Its Impact: Globalization And Its Impact

Globalisation and its impact
Economically, globalisation paves way for a greater degree of interlinkage between economics and allows for an interactive and collective market where production and consumption is global rather than private. It allows not only for a collective market but also for an interdependent society. However, the other side of globalisation is found in the dominance of larger markets over smaller ones. This can be illustrated by the increased pressure on resources altering the relative prices of commodities as a direct result of growth in large emerging market economies. More importantly, globalisation results in creating an antagonism between the need to have an international market which increased productivity and enhances

further, through the development of the social contract, sovereignty became complex. As Rousseau noted the state had the responsibility of creating equality among its citizens. Therefore, a notion of obligation was attached to the absolute nature of sovereignty. there has been a shift from pure state sovereignty to human sovereignty in which the welfare of individuals was paramount which the state was obliged to guarantee. It imposed an obligation on the state to direct its political, economic and social life of its people according to its values without external pressures. However, there has been a significant change in the understanding of a nation state as a welfare state due to integration of markets. Economic globalisation has been limiting the capacity of states to direct their own policies and shifting the focus away from welfare to economic stabilisation of domestic markets to overcome the externalities of an international economy thereby asserting the primacy of markets over welfare. For instance, with the 2008 financial crisis austerity measure including cuts in public sector employment, reduction in public sector workers pensions all in the name of competitiveness and economic efficiency have been introduced. Another offset of the pressure to introduce such measures is the increased pressure to protect

The reaction of the nation state towards the impact of globalisation can take two routes. Firstly, the route towards protectionism where in nation states try to protect domestic markets from the cyclical downturns of the international markets by introducing stricter trade barriers and restricting free movement of goods and workers. However, considering that the integrated markets bring with it several benefits of international trade and also contribute financially deficit welfare states by utilising a labour force that is international, protectionist measures my result in closing of the state not only from such benefits but also from the movement of labour forces thereby reducing its productivity. In contrast, given that globalisation is an economic reality, nation states must provide a welfare state that caters not only to local specificities but to an international and diverse community where policies are aimed at ensuring a minimum safety net for all of its citizens that will help overcome the externalities of the globalised market. This may also be regarded as a formative stage of political