Globalization: A Threat or an Opportunity?

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The general definition of globalization is a global process which makes products, prices, rates of interests and profits, and wages similar everywhere. It also accelerates the flow of money, goods, people and cultures all over the world. It is basically standardizing everyday life all over the world. A sociologist by the name of Anthony Giddens defined globalization as “a decoupling of space and time, emphasising that with instantaneous communications, knowledge and culture can be shared around the world simultaneously” (Globalization Guide). Globalization most importantly breaks down trade barriers and integrates world markets. Another definition of globalization says that, “globalisation can be seen as an evolution which is systematically restructuring interactive phases among nations by breaking down barriers in the areas of culture, commerce, communication and several other fields of endeavour” (Akindele, Gidado & Olaopo, 2002).The concept of globalization needs to be understood in order to understand the rapid social change that is taking place currently and to understand the transition of society into the third millennium. Can old Marxist of functionalist theories be adapted to try and explain globalization or do we need fresh ideas?

“Globalization as a concept refers both to the compression of the world and the intensification of consciousness of the world as a whole . . . both concrete global interdependence and consciousness of the global whole” (Robertson, 1992 cited in Waters, 2001).

Robertson interprets global compression in terms of interdepency between nations by means of trade, military coalition, and domination, which he claims has been around since the sixteenth century and even before that (cited in Waters, 2001). Waters (2001) agrees with the opinion of Robertson and his concept of global consciousness and suggests that globalization is a process of localization rather than the grand concept of the world merging together as one. This simply means that national communities will use the reference of other nations in order to come to choose the values they want to emphasize and make decisions. Waters predicts that a fully globalized world will have one single culture and society which will probably not be harmoniously integrated, rather it will be disorganized, and contain many layers of differentiation. There will be no central organizing force and no tight set of cultural norms and value. It will be a highly tolerant society that allows for diversity and individual choice. Waters adds that we will not be able to predict social practices or likes and dislikes on the basis of geographical location because territorialism will disappear and we will live in a world without borders. Therefore we can no longer assume that people that live in the same area will understand each other better than people who live far apart. This idea emphasizes on the notions of time and space. According to Robertson, globalization involves the social and cultural connections between humanity in general, the international society, the national society and the individual (cited in Waters, 2001).

Globalization is a process that has taken centuries to come to the point of where it is now. During the Mongol Empire, the first hints of globalization in the form of integration of different cultures could be seen as people set out on journeys to acquire goods. Later on in the 16th and 17th centuries, the expansion of the European trade found itself reaching out to all corners of the world; continuing global integration. “The First Era of Globalization” was said to be in the 19th century when international trade and investment between the European imperial powers and their colonies were rapidly growing, but it abruptly came to a halt with the beginning of the First World War and till the end of the Great Depression. Globalization during the nineteenth century was a process of war, military coalition, diplomacy and colonialism. Now it includes trade and cultural relations as well. After the Second World War, the expansion of capitalism took off like where it left off and the development of more multinational companies and international businesses was fertilized with the advancement in technology particularly in the areas of travel and communication and reduced costs. The causes of globalization so to speak or rather the spark that caused the fire is the advancement in technology in the areas of transportation and communication. The emergence of the internet was definitely a revolution that set globalization on fire. It speeded up connectivity and communication, allowed for a huge knowledge pool of infinite resources and information and paved the way for a whole new virtual global market. Another important point in history relevant to globalization was also when capitalism had won the victory over socialism with the fall of the Berlin Wall and the collapse of The Soviet Union on November 9th, 1989. It was the end of the Cold War and capitalism had won. Communism made people equally poor and now capitalism was to make people unequally rich, but was also to be the driving force behind globalization. In fact the ripple effect of the fall of the Berlin wall was felt all the way to India. Trade controls were abolished and economic growth was up to a seven percent (Friedman, 2006). The Berlin wall, says Friedman had been blocking our sight as seeing the world as a single market and single community. The world became a better place after the fall of the Berlin wall “because each outbreak of freedom stimulated another outbreak” (Friedman, 2006). For example, even women were starting to get their freedom in this era. The emergence of capitalism is a major aspect or dimension of globalization because of its effectiveness in production and the power that it offers to those in control of it. Capitalism is basically driven by two main things, being mass production and mass consumption. Capitalism causes modernization. It liberates us from traditional constraints. This aspect of capitalism and globalism has been the topic of many debates arguing that traditional and cultural values are being lost to modernization. However I do not think it is the worst thing in the world to lose some traditional values. Traditional values such as the caste system in India have been a large barrier for the people of India to develop and grow. So maybe there is more to gain than to lose. Furthermore, globalization seems to be increasing diversity rather than decreasing it. Take for example the most popular food in the world today – pizza. People all around the globe eat it, the base of the pizza is the same but the toppings are diverse and different. In Japan, you might have sushi pizza and in India you might have curry pizza. Nobody is forcing us to be the carbon copies of Americans. Globalization is about “thinking global and acting local” as Theodore Levitt said (Waters, 2001).

An important factor determining globalization is that capitalism allowed for people to tap into each others knowledge pools. It also paved the way for adoption of common standards. For example, how banking should be done or how computers should be made.

However although globalization is supposed to standardize everything, it causes many inequalities. According to standard theory, the distribution of income levels between countries should benefit everyone, but there has been much debate that free trade is making the rich countries richer while making the poor countries poorer. According to Williamson, there is no support or proof through economic analysis that free trade is causing inequalities between countries (1998). On the other hand, standard theory is less clear on the effects of domestic income distribution. Standard theory says that trade will hurt unskilled labour in rich countries because poor countries will export labour intensive goods to rich countries; increasing the demand for unskilled labour in poor countries and decreasing the demand for unskilled labour in rich countries and therefore making the rich in rich countries richer and the poor in rich countries poorer.

Globalization may be identified by several characteristics. The main one being greater international cultural exchange through increased travel and tourism, better access to cultural diversity through for example Hollywood and Bollywood movies and food, greater immigration, and world wide fads such as ‘YouTube’ and ‘MySpace’. The second most obvious characteristic that can be noticed is the development of global telecommunications infrastructure such as the internet, communication satellites and wireless telephones. There has also been an increase in world trade agreements and many advocates for an international criminal court and justice movements. The standard of living,literacy and health has improved in Third World Countries thanks to globalization. Some aspects of globalization are intentional such as to such as international trade and increasing world market exchange. Globalization’s main intentions are economical. The inequalities that are caused and other such things are a consequence of globalization. Social problems such as terrorism are also an effect of globalization. Islamic fundamentalists see globalization as the Western world trying to take over and extinguish their traditional beliefs and values so they have become increasingly protective and defensive of their religion leading to fanatical and extreme actions such as terrorism. It is also often argued that terrorism as well may have gone through globalization as there seems to be no direct relevance of attacks in foreign countries to the country of the attackers.

In general globalization has had a positive impact on developing countries because economic growth has been allowed to grow at a faster pace through the opportunities for applying world-class technologies in their countries. Knowledge and technology that are readily available throughout the world is boosting economies in developing countries. They are also able to make full use of their abundant unskilled labour. There are also of course dangers involved when developing countries or third world countries expose themselves all of a sudden to international markets; they are vulnerable to external shock. Many times they are not yet ready to enter into the flow of things but are being pushed into it by other pressures and find themselves sinking. For example, the East Asian Crisis in 1997. Some would argue that developed countries are only creating more debt in third world countries. However, Williamson argues that while globalization increases external shock, it decreases internal shock (1998). For example, when Bangladesh was overwhelmed by the terrible floods, the financial aid of the international community in helping to cover the costs of the floods and easily available import of extra rice saved many lives. In general, globalization affects the world in five different ways according to Williamson (1998). Firstly, it affects the world industry. The development of multinational companies gives us access to a broader range of products and goods. For example, I face no difficulties at all buying South East Asian food products in Germany because of this. Financially, globalization has ignited the emergence of international financial markets, making international bank loans possible and flourishing businesses around the globe. The spread of political interests is also another affect of globalization. Lastly, we could say a new culture has emerged from globalization, a world culture that is open to diverse cultures and new ideas, ready to adapt to new technologies and practices, and the willingness to try foreign goods (Williamson, 1998). Although there has been some criticism that it is not a new culture that has emerged but rather ‘Americanization’ is conquering the so called new world culture. I certainly agree to this up to a certain extent as it is only normal for the culture most dominant and in power to be adopted as one’s own. However, when a new culture is adopted, it does extinguish the old beliefs and values automatically; rather it tries to integrate them into the existing culture. Theoretically, globalization should improve cultural integration as now international markets are forced to learn about the values and beliefs of other cultures in order to work efficiently and in harmony together. Initially, concepts such as management and leadership were assumed to have universal expectations (Hofstede, 1983). For example, a good leader is somebody who takes into account the opinions of his followers before making a decision. Now we have come to realize that this may not always be seen as something positive in all cultures. Therefore, it has become increasingly important to be culturally sensitive to the needs and expectations of diverse cultures in order to be an efficient leader or manager in an international company.

Globalization is shrinking the world because of the concept of time and space. As space is measured in time, and the time it takes to travel from point A to point B is getting shorter, so space appears to shrink. According to Waters, the globalization process effects the economy, polity and culture. Economies lean towards free market and less trade barriers; polities lean towards the deconcentration of power through liberalization and democratization; and culture leans towards an abstract culture that will allow for diversity and highly tolerant. Marx has written about the way in which capitalist will try to decrease national boundaries by expanding transportation and communication into all corners of the world in order to expand markets all over the world and increase labour power. Industrialization also plays a part in the process of globalization. Kerr, Dunlop, Harbison and Myers suggest that industrialization causes societies to become more similar (cited in Waters, 2001). The argument is that industrial societies are more similar to each other compared to non-industrial societies with each other. The rationale behind it is that all industrial societies are progressively looking for effective technology to increase their production of goods and their social systems will also progressively adapt to that technology. Industrial societies will also develop similar values such as commitment to work and materialism. Bell, on the other hand argues that post-industrialism will create more convergence than industrialism (cited in Waters, 2001). Bell proposes that the advancement of technology to for production of services and not goods will create that convergence (cited in Waters, 2001). Social science in the twentieth century has discovered that colonialism and imperialism produce an international division of labour. It can be observed that developed countries are focused primarily on skilled labour, whereas developing countries are focused primarily on unskilled labour. This division of labour produces a relationship of domination and interdependency.

According to Marx, the bourgeoisie is creating the world in its own image. The interdependence of states and the emergence of the bourgeoisie as world capitalists will unite the proletariats and they will rise to power overtaking the bourgeoisie institutions. It is not difficult to imagine this when looking at China and India right now. There is a high possibility that they may be the future superpowers of the world. India had its boost because of Y2K. It took India to a whole new level of outsourcing. Outsourcing here means taking a function that used to be done in local companies and having another company elsewhere in some other part of the world to do it. For example, like the call centres in Bangalore where thousands of Indians fake American accents and make and answer calls from the United States. China on the other hand, had its boost when it joined the World Trade Organization which took it to another level of offshoring. Offshoring is when a company takes a factory that was operating for example in the United States and moves it  to China. There, it produces the same product, only for cheaper labour, lower taxes, subsidized energy, and lower health-care costs. The sudden boost of India and China has had the same effect as on a person who realizes just how fast he can run when a dog is chasing him. In other words, the challenge that India and China has set for the United States is making the rat race even more face paced than ever and the world has never seen a time where new information and new discoveries bloom at such a rapid speed. Correct me if I’m wrong, but there is definitely an information overload!

The globalized world according to Marx will be harmonious and undivided, the poor will be emanicipated and exploitation will come to an end. Most theroies of globalization are uni-dimensional; that is a single part of human life is used to explain social phenomena for example for Marx it was structures of material production; for Parsons it was culture; and for Mead or Schütz it was subjective meaning (Waters, 2001). Marx’s theory that political and and theoretical boundaries will only disappear after the proletrariat achieve their supremacy is supported ny many twentieth century theories such as Marxisant dependancy theory, functionalist modernization theory, convergence theory and world system theory. However, Marx’s theory and other uni-dimensional theories emphasize on the economical aspect of globalization but tends to leave out other important aspects such as politics and culture. Therefore we should also look to multi-dimensional theories for further answers. Multi-dimensional theories of globalization emphasize on subjectivity and culture as the main factors in the process of globalization.

Globalization can be measured through the exports and imports as a proportion of national income, migration rates, investments as a proportion of national income, and technological advances. Many people argue that globalization causes poverty, but if we observe correctly, the countries that are open to global capitalism are developing rapidly and becoming richer. While the countries that are closing their doors to global capitalism are not growing economically and remain poor. Anti-globalization movements argue for the rights of people in developing countries saying that western countries are exploiting cheap labour in these countries and encourage us to boycott buying the products. While these sweat shops in developing countries may look inhumane and unfair to us, in the long run, it will actually work to the good of the people. For example, in the 60’s, Taiwan was a sweat shop for producing cheap toys, people were exploited, they worked hard and were paid poorly, but look at Taiwan now. If anti-globalization movements had protested for the rights of these people and enough people had boycotted to stop buying cheap Taiwanese toys, hundreds of Taiwanese would have lost their jobs and Taiwan would not be where it is today. Although, anti-globalization movements may have good intentions, they may actually cause more harm than good because they do not see the big picture and the long term effects.

On the other side of the coin, the European Union spends more than half of its expenditure in domestic agricultural subsidies artificially lowering the costs of production and increasing production. This results in decreasing world market prices and reducing the amount of income that people in other countries get for their goods, hence not giving Third World countries a chance to compete in agricultural export which actually could be their main source of income. These subsidies also lead to overproduction of agricultural goods and even worse further lead to overuse of land, pesticides and fertilizers. The tariffs set for agricultural products are also high for Third World Countries. The free trade protectionists choose to set restrictions trade on just the areas which could profit Third World Countries. Third World Countries on the other hand, are not opening their doors to globalization and the Western world is also closing their doors on them. Basically it is between choosing a win-win situation or a win-lose situation. Third World Countries can choose to open their doors to globalization and improve their living standards and the Western World gets what it wants or Third World Countries refuse to open their doors to globalization and remain in their poverty, while the Western World continues to get richer. If The Third World does not surrender to globalization, they will continue to suffer. The current suffering should be weighed out with the potential negative consequences of globalization for us to be better able to see a clearer picture. Free trade in the perfect world is in my opinion is a tool for positive economic change and development especially for poor countries; the problem is that this is not the perfect world and free trade is not fair trade here. It is supposed to mean fair exchanges but political interests have brought change to its meaning. It now means government intervention to direct, control and restrict trade. The government decides what their citizens should buy and what prices should be paid for them.

Akindele, Gidado and Olaopo argue that globalization only enhances international trade in countries that have the same level of economic development. Toyo (2000) calls globalization an “imperial policy” and the “final conquest of capital over the rest of the world” (cited in Akindele, Gidado & Olaopo, 2002). In this era of globalization, pressures are high and options are few. For example, currently China is under a lot of pressure to integrate into the capitalist economy and let go of their current political rule. Failure to integrate into the system means losing out. But are we losing our independence and freedom as a consequence? Did we ever have it in the first place?

Most environmentalists such as Green Peace and other such organizations are anti-globalization because of the effects they claim globalization has on the environment. They believe that more and more industrial companies are migrating to developing countries because they do not have to pay for the pollution costs in these countries and the rules that are concerned with such things as pollution is much more lenient than in their home countries. An important question to ask is who are the players? The players of the game called globalization are the dominant social forces in the world today. Why are they playing this game? Common sense. What is the main goal of anyone who is playing a game? To win of course. There are two ways of looking at this game. It is either that it is a game where everyone can win or it is a game where there are winners and also losers. The problem with our species is that when we finally do strike the lottery and everyone can have afford to have a fair share of the prize and live happily ever after, we decide that the fair share is not enough because we assume that if there are losers, it means that the winner’s prize is bigger. Ohiorhenuan (1998), Mowlana (1998), and Oyejide (1998) Grieco and Holmes (1999) respectively are of the opinion that “globalization is a positive or powerful force for the improved material well-being of humankind, that would aid developing countries to create better economic environments; improve their access to technology; and enhance global harmony”, however the political, economic, social and cultural effects on the weaker countries cannot be dismissed (cited in Akindele, Gidado & Olaopo, 2002). The positive effect globalization has had on the world should not be ignored just because of the negative consequences. In fact, the world has never seen such vast improvements on the standards of living before. The eradication of diseases, clean water, education, and reduced infant mortality rate are critical social changes that have taken place in the name of globalization. Maybe globalization could be our only answer to the world’s problems, our last chance and only hope to make the world a better place, but will we use it or will we rather blame it on human nature? There is this story about a scorpion and a frog who both wanted to cross the river. The scorpion said to the frog that if he could carry him across the river, he would not sting the frog. The frog agreed. Halfway across the river, the scorpion stings the frog and as they are sinking, the frog asks the scorpion why he had done that, the scorpion simply replies that it is his nature and they both drown together. We can choose to cooperate and achieve our goals together or we can let our greed drown us all.

Earlier, I mentioned that the fall of the Berlin wall was one of the sparks that set globalization on fire. It is interesting to note that before the fall of the Berlin wall, Osama bin Laden and Ronald Reagan had a common enemy- the Soviet Union. However after America became the superpower, it became Osama bin Laden’s enemy. It is a funny coincidence as Friedman says that on 11/9 the wall fell and 9/11, invisible walls were built up again (Friedman, 2001). Let us break down these walls.

References

            Ahmad, A. (2001). Globalization and the Developing Countries, with Special Reference to Cuba. Retrieved February 10, 2007 from  http://globalization.icaap.org/archives.php

Akindele, S.T., Gidado, T.O., & Olaopo, O.R. (2002). Globalization, Its Implications and Consequences for Africa. Retrieved February 10, 2007 from http://globalization.icaap.org/archives.php

Dunklin, A.L. (2005). Globalization: A Portrait of Exploitation, Inequality and Limits. Retrieved February 10, 2007 from http://globalization.icaap.org/archives.php

Friedman, T.L. (2006). The World is Flat. Farrar, Straus, and Giroux.

Globalization Guide. Retrieved February 13, 2007 from http://www.globalisationguide.org/

Globalization. Retrieved February 12, 2007 from http://.www.wikipedia.com

Imade, L.O. (2003). Two Faces of Globalization: Impoverishment or Prosperity? Retrieved February 13, 2007 from http://globalization.icaap.org/archives.php

Waters,M. (2001). Globalization. Routledge.

Williamson, J. (1998). Globalization: The Concept, Causes, and Consequences. Retrieved February 13, 2007 from http://www.iie.com/publications/papers/paper.cfm?ResearchID=330

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