Globalization: Its Pros and Cons from a Social, Political and Economic Perspective - Coursework Example

Running Head: GLOBALIZATION Globalization: Its Pros and Cons from a Social, Political and Economic Perspective Student name Unit name and number Assignment topic Due date Submitted date Globalization: Its Pros and Cons from a Social, Political and Economic Perspective Globalization can be defined as the process by which the world is moving towards international economic integration, consensus on political relations and an explosion in the use of information and communication technologies (Lechner, 2009, p. 15). This means that globalization seeks to achieve openness in the international economy as well as integration of markets on a worldwide basis. This process is created and driven by different factors including finance, trade, communication and transport. These factors drive the way different nations integrate their social, political and economic system. In this paper, the advantages and disadvantages of globalization are presented. Emphasis is placed on evaluating both the costs and benefits of the process from a social, economic and political perspective. Advantages of Globalization One key advantage of globalization arises from its positive impact on national economies. According to the World Bank (2002), globalization affects the productivity, efficiency and competitiveness of world economies (p. 6). The benefits of these effects have been experienced in several ways. To begin with, globalization has led to an increase in global trade and investments. This has been achieved though the role of international trade agreements such as General Agreement on Tariffs and Trade (GATT) and that of international bodies such as the World Trade Organization (Intrilligator 2005, p. 68). This has had a positive effect on world trade and overall economic growth. By affecting the investments and capital of world economies, globalization has led to an increase in the level of foreign direct investments in the world economies (Intrilligator 2005, p. 69). With the rise of foreign direct investments, national economies across the world have benefited in terms of increase in the rate of technology transfer, restructuring of the industrial activities in these nations and the formation of new enterprises. Another advantage of globalization in relation to its impact on national economies is that it promotes division of labor and specialization (World Bank, 2002, p. 8). This implies that due to globalization, different economies of the world have benefited in terms of increased productivity and the corresponding reduction in the costs of production. As a result, the benefits of reduced prices and general growth of the economy are passed down to individual consumers across the world. This is reflected in a general rise in the living standards of populations. According to Wagner (2005), globalization reduces inflation in local economies because of its competitive effect on these economies (p. 623). This is so because by exposing the private sector of different economies to global competition, the order and discipline of global financial markets is transferred to these sectors. This way, economies are forced to increase their overall efficiency in both public and private sectors. Also, globalization is associated with overall development of the financial sector and performance of different economies in the world. Through the process of globalization, countries are able to benefit in terms of improved financial sector development, development of the quality of work done by their financial institutions and improvement in the financial and general economic policies adopted (Dell’Ariccia et al., 2008, p. 17). What is important here is that as a result of integration of different economies, nations benefit from strengthened financial institutions and improved policies. It can also be seen that national economies benefit from globalization in terms of having an increased sense of financial security. This arises from overall risk-sharing benefits that come with integrated economies and financial markets. Another advantage of globalization is associated with enhancing the nature and method of communication in the world. It has been pointed out that one of the main factors driving globalization is rapid advances in information and communication technologies (Zembylas & Vrasidas, 2005, p. 66). Although this is the case, globalization does also contribute to an increase in the use of information and communication technologies in the world. Through competition and foreign direct investments, globalization has enhanced information flow in the world by speeding up the process of adoption and spread of the use of information and communication technologies across the world (Zembylas & Vrasidas, 2005, p. 68). With increased use of technology, the society has been transformed in several ways. For instance, the increase in access to and use of information has necessitated developments in the form of universal connectivity, increased mobility and new technologies such as biotechnology and nanotechnology (Mannermaa, 2005, p. 4). According to Barreiro-Pereira and Mochon (2005, p. 281), technological revolution resulting from globalization has led to tangible benefits such as a sharp increase in the number of international travels, a rise in the use of mobile phones and a corresponding reduction in the costs of communication and transport (Boudreaux, 2008, p. 6). The overall effect of this trend has been felt in increased political and social freedoms across the world. Disadvantages of Globalization One disadvantage of globalization arises from unequal rates of development between different nations in the world. This invariably leads to the majority of nations depending on a minority of well developed nations who play a key role in the global economy. For instance, although globalization has been seen as a possible way of spurring economic growth in countries in the developing regions of the world, the reality is that only a small group of countries in these regions have been experiencing growth as a result of increase in international trade and integration (World Bank, 2002, p. 3). Because of this, there have been growing inequalities in the world economies in terms of income, wealth distribution and rates of economic growth between nations. O’Higgins (2003) observes that as a result of globalization, global fragmentation has been witnessed in terms of income distribution between rich and poor nations, unequal access to healthcare and differences in the rule of law and democratic practices in general (p. 53). Secondly, it has been pointed out that one of the pillars of globalization is increasing integration of social and political systems across the world. Although this is a desirable end, it presents a number of possible disadvantages. For instance, interdependence of different economies across the world increases the possibility of regional or global instabilities and conflicts (Ritzer, 2009, p. 461). Since many economies are linked to each other, the possibility of a financial or economic crisis arising from fluctuations in a local economy spreading across regions or even the entire global economy are real. This is so because with increased integration, the propensity for mutual vulnerability increases. The Global Financial Crisis of 2007/8 is a real example. Although the crisis was triggered by fluctuations in the United States economy, its effects spread across different economies of the world as a result of many economies being interrelated (Lane, 2012, p. 10). The third disadvantage arising from globalization arises from the role of transnational corporations and leading economies in the affairs of different nations across the world. According to Preda (2008), transnational corporations are key aspects of globalization because of their role in influencing the culture and economy of other countries (p. 3). Although the effect may be positive, it is generally seen as a negative aspect of globalization. This is because with the growth of transnational corporations, the cultural and social values of the mother nation are exported to different markets as well. This leads to cultural clash and a feeling that the cultural as well as economic life of nations depends on the forces of globalization (Bond & O’Byrne, 2014, p. 33). This is the case when globalization is understood under the transnationalization model. With this, social problems such as xenophobia, an increase in protectionist policies and extreme nationalism politics lead to social and political problems for different nations across the world (Ritzer, 2009, p. 438). Apart from the social and economic impacts of globalization, the process has also been associated with other non-economic impacts on different economies across the world. These effects arise from the role of globalization in encouraging human and environmental problems. According to Coatsworth (2004), the process of globalization has caused a number of different environmental and human problems across the world (p. 49). For instance, with the rapid development and integration of markets, problems such as extensive deforestation, extensive water pollution and proliferation of unplanned for urban settlements arose. In addition to this, globalization is also associated with environmental problems such as global warming and unsustainable use of natural resources in different regions of the world. O’Brien and Leincheko (2000), note that the effects of climate change are enhanced by differences created by economic globalization (p. 225). Because of the integration of different economies, such political or environmental crises can escalate into large scale pandemics. Conclusion In conclusion, the fact that globalization is built on using advances in technology, finance, trade and communication to develop integrated economies in the world means that the process presents both advantages and disadvantages. These effects occur in social, political or economic perspectives and may be felt in isolated economies, different regions or the entire world economy. One advantage of globalization arises from its effect on different national economies. Globalization increases productivity, competitiveness and specialization. With these, economies are able to take advantage of reduced costs of productivity and increased specialization to achieve faster economic growth. Also, as a result of globalization, there is increase in international trade as well as in foreign direct investments. These are regarded as necessary conditions for economic growth and improvement of social welfare. One the other hand, it has been seen that globalization contributes to inequalities in economic development between rich and poor nations in the world. This inequality has been experienced in terms of income distribution, access to healthcare and in social and political factors such as respect for the rule of law. 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Zembylas, M. & Vrasidas, C. (2005). Globalization, information and communication technologies, and the prospect of a ‘global village’: Promises of inclusion of electronic colonization? Journal of Curriculum Studies, 37(1), 65–83. Read More