The Pros and Cons of Globalization

The Pros and Cons of Globalization

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Globalization is a broad concept and the angle taken to define it can
lead us to interpret the idea in many different ways. There is much
controversy about what globalization actually means and many
definitions fail to encompass social, cultural and technological
exchanges between world systems. John Pilger suggests that "it is a
jargon term which journalists and politicians have made fashionable
which is often used in a positive sense to denote a 'Global village'
of free trade, hi-tech marvels and all kinds of possibilities that
transcend class, historical experience and ideology." (J.Pilger
1998:63). Taking a broader point of view, Bilton et al defines
globalization as "The process whereby political, social, economic and
cultural relations increasingly take on a global scale, and which has
profound consequences for individuals, local experiences and everyday
lives." (Bilton et al 1996:5)

The process of globalization has certainly had many changing effects
to the world we live in; it has also changed the way many factors
operate. Globalization is said "to have transformed the structure and
scale of human relationships that social, cultural, political, and
economic processes now operate at a global scale with a consequent
reduction in the significance of other geographical scales."(The
Dictionary of human geography 2004:315)

Globalization has had both positive and negative effects on a local,
national, international and global level. Globalization often brings
benefits at one level which cause negative effects at another, these
results and the scale at which they manifest are often uncertain and
unpredictable. The very nature of its unpredictability causes
instability and introduces risks to all actors involved (many of these
actors unwillingly). The economics of globalization is very relevant
in understanding how processes work and how it affects other issues.
Without the notion of a truly global economy many of the other
consequences such as culture and politics would either cease to be
sustained or become less threatening. In our modern world, finance and
economics is the driving force behind globalization, and globalization
is serving capitalism well.

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From an economic point of view
Globalization can be seen as "a primarily economic phenomenon,
involving the increasing interaction, or integration, of national
economic systems through the growth in international trade, investment
and capital flows." (Globalization guide)

Improvements in transportation and communication have encouraged large
cooperation's to move outside of their regulatory national boundaries
and into other areas worldwide. The movement of these companies can be
seen as a positive effects as corporations are 'opening up' new
markets and therefore there are greater opportunities, benefiting both
the actual company and members of the community in that location.
Multi national companies (MNC's) such as 'Ford' are attracted to less
economically developed countries due to a cheaper labour force and
cheaper raw materials. The globalization of manufacturing has given
rise to many large MNC's. Initially this can be seen as a mainly
positive effect as large corporations bring in the promise of market
integration, employment and greater wealth into counties in which they
operate. Industrial expansion in the less economically developed world
has spawned some very large companies. For example, industrial growth
in South Korea was achieved largely through activities of major
companies such as, Samsung and LG. The introduction of MNC's has also
led to the multiplier effect whereby further indirect positive effects
are caused by the establishment of a company, for example social
benefits. Globalization and the increase in MNC's have accelerated the
flows of investment into areas which are lacking in development. In a
report taken from the UN (2003) in the last 20 years more than 70
countries have strengthened legislation to promote investment in
extractive industries such as coal and oil. Investments in developing
countries increased from 1,219 in 1988 to 5,671 in 1997. Investment in
these areas can have direct positive effects on the population and the
local economy. Investments in mining exploration and investment in
Africa has doubled between 1990 and 1997 (UN). From a negative point
of view investment into these countries does not always go straight
into the local economy. A free-market means that little is done to
address re-distribution of wealth and money is not reinvested back
into the community but directly to the company owners. These countries
can be exploited by the MNC's and therefore receive little benefits.

Corbidge discusses how the concept of globalization has increased
recognition alongside processes of deterritralization, the flow of
capital and technology across national boundaries reduces the
importance of national space in economic decision making. This change
in power structure means that multinational companies are now able to
transcend traditional regulatory boundaries set by the nation states.
Generally the traditional role taken by the nation state is to
facilitate both economic and social development. Since the
introduction of MNC's the role of the nation state has been weakened
and it has now shifted to one run by money capitalists whose prime
objective is the accumulation of capital. This does not necessarily
lead to beneficial development of areas where these companies choose
to 'set up'. The United Nations state the level of benefit that
globalization brings depends upon the strength and effectiveness of
the government and the stability of domestic institutions. The
countries which lack this political power and stability are those
which do not reap the benefits or on the contrary are exploited by the
MNC's. Institutions such as the World Bank, World Trade Organization
(WTO) and International Monetary Fund (IMF) have been created as the
new regulatory systems on a global scale to regulate MNC's. However,
while these supranational organizations make decisions behind 'closed
doors' they continue to be undemocratic and favour those with power at
the expense of others. This is a prime example of how globalization
has had a negative effect on developing countries. Only true
restructuring of these systems will enable them to effectively bring
positive change throughout the world.

A major negative effect of globalization has been the gradual division
of the North and the South (more economically developed countries and
less economically developed countries) It can be argued that
globalization has decreased the difference between MEDC's and LEDC's.
By looking at figures from the HDI in the UN development Report 1999
some countries have increased income due to globalization. China's
opening to world trade has brought it growth in income from $1460 a
head in 1980 to $4120 by 1999. However, although some countries have
benefited from economic development through globalization many
countries remain poor. "The gap in incomes between the 20% of the
richest and the poorest countries has grown from 30 to 1 in 1960 to 82
to 1 in 1995." (UN development report 1999) Many of the countries that
are not developing are those which are not open to world trade.
Jonathan Barton highlights the importance of understanding the
North-South divide in his analysis of the political geography of South
America. The research into issues of global development by the Brandt
Commission in 1980 and 1983 emphasizes the importance of understanding
complex inter-relations in terms of production and consumption, health
and welfare and the environment. A greater understanding of these
issues is essential to prevent further division between the North and
South.

Many people believe that globalization has decreased poverty and
inequalities in global income. China's opening to world trade has
encouraged huge development of the economy and industries and
therefore this has encouraged further social development within the
country. This statement can be supported by looking at the Human
Development Index (HDI) which is a measure of a country's development
that takes into account life-expectancy, educational enrolment, adult
literacy and per capita income. In 2001 China was ranked 99th out of
174 countries, in 2001 it was ranked 106th. The growth of income per
capita has increased dramatically and this is a direct cause of
development through globalization. The Spread of globalization is
thought to benefit many newly developing countries which will decrease
the divide between the more economically developed and the less
economically developed. Although countries have benefited from
globalization, for example, the newly industrializing countries such
as Korea and China. Many countries remain poor and the gap between the
rich and the poor nations is continually increasing, this is the case
for many African and Eastern European countries where the HDI has
fallen. It is believed that increasing inequality is a direct result
of market forces. Large corporations give the rich the power to add to
their wealth and they also have the freedom to 'set up' in poor
countries to make greater profits from low wage levels and
exploitation of resources.

With the United States as the super power we have seen a dramatic
homogenization towards the American way of life. This
'Americanization' brings with it a culture of consumerism, competition
and life styles which are apparently free from social and
environmental responsibility. This change and the following of 'the
American dream' is not generally positive and many cultures are being
lost or 'swallowed up'. For many cultures the new diversity that
globalization brings is disquieting and disempowering. People fear
that their countries are becoming fragmented and that traditional
values and cultural identities are being lost. There are many driving
forces which help spread Americanization but the main contributing
factors are the huge multi national corporations. There are no brand
names that have the same global resonance as McDonalds and Coca Cola.
These corporations have a stranglehold on the world and they are a
huge driving force behind globalization and changing international
attitudes. "There is growing fear of being taken over by new types of
technology and the general ambivalence towards globalization, of which
McDonald's has become a symbol" (The Guardian 1999).

The US has been dramatically responsible for transforming
communication by the invention and democratization of the internet.
"speed is the defining character of the internet age, this new
technology has shrunk the world radically, making globalization a
reality." (The Guardian 1999). The increased access to communications
through the media has heightened public awareness. However, John
Pilger sees the media as simply propaganda of western power, by its
manipulation of language and omissions, which often prevents us from
understanding the meaning of contemporary events. Increased
consciousness about world events has also lead to increased
uncertainty which can arguably be linked with an increase in fear. As
we learn more about what is happening in the world our consciousness
about the instability also grows. The recent surge in terrorism is a
new global threat that is linked to attacking Americanization and
protecting cultural and religious beliefs. To a large extent it is
built on fear from the growing uncertainty that we face and the
organization of groups and attacks which has been made quicker and
easier through the increased communication. However the Zapatista
movement in Mexico managed to largely avoid violence by the use of the
internet is an example whereby globalization has served to mobilize
forces outside of the locality in a new way to reap positive results.

Conclusion

In Conclusion there are evidently positive and negative consequences
of globalization. These effects are either direct results of
globalization or indirect results caused by factors linked to
globalization. Throughout this essay I have stated many of the major
effects globalization has caused to our world system. Many of these
effects have been around since the beginning of globalization however
some are more recent issues such as the internet and terrorism. It is
clear that globalization has had many positive effects to world
markets. Globalization has helped open up new trade areas where LEDC's
can benefit from a range of beneficial outcomes such as new employment
opportunities and greater economic development. As stated previously
not all countries have benefited from the spread of globalization and
in fact many countries have been exploited. In order to sustain
globalization and to limit negative outcomes MNC's need to be
regulated to stop further exploitation. If globalization continues to
aid the flourishment of global capitalism a sense of social
responsibility needs to develop along side it. As our awareness or
access to knowledge grows we must take responsibility for our actions.
Failure to do so means we will live in a continually polarized world
where the gap between the rich and poor continues to cause global
atrocities and growing instability such as global terrorism that we
are witnessing now.

Bibliography

Pilger J, (1998), Hidden Agendas , London. Chapters 1 and 5

The Guardian, Monday Nov 8th 1999, Planet USA

Bilton et al (1996), Introductory Sociology: 3rd Edition, Macmillian

Barton J.R, (1997), A political Geography of Latin America, London,
Routledge

www.globalisationguide.org
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