Globalization and the Politics of Resistance - Essay Example

Globalization and the Politics of Resistance Introduction In 1990s globalization was the most defining term. Human beings over the past thousand years have interacted with one another. The Silk Road can be treated as an appropriate example of translocal exchange as it was a medium to connect Europe, Asia and Africa. They were even considered as the regions belonging to “Old World”. Language, arts, philosophy, religion, and cultural elements mixed and spread as nations involved in exchanging ideas and products. In 16th and 15th centuries Europeans developed their market position through some important discoveries. These discoveries mainly resulted from their ocean exploration encompassing transatlantic travel of Americas to New World. Global movement of ideas, people and goods expanded during those centuries. In 19th century there was development of wide array of transportation forms like railroads and steamship. Significant development was also observed in telecommunication sector that compressed space and time, facilitating increased global interchange rapid rates. During 20th century airlines, vehicles and intermodal transport made transportation even faster. Electronic communications advent in terms of Internet and mobile phones connected millions of individuals through various new ways. This study would outline historical perspective of globalization. There are different dimensions associated with beginning of globalization and its impact on the present scenario. Since mid 1980s, globalization has gained its significance. Four basic elements of globalization has identified by International Monetary Fund are investment and capital movements, transactions and trade, movement or migration of people, and knowledge dissemination. History of globalization as stated in this study would reflect upon various factors that influenced people to exchange goods or services across the globe. . Discussion Globalization is mechanism of integration and interaction amongst individuals, governments and companies of wide range of nations. It is a process driven by investment and international trade and is supported by information technology. Globalization process has serious effects on culture, environment, economic prosperity and development, physical well-being of individuals in society, and political systems across the globe. The concept of globalization is not new it has come into existence many years back. Thousands of years humans firstly and then corporations indulged into buying and selling to one another across large distances. This was majorly done through Silk Road which connected Europe and China in middle Ages. Similarly corporations and individuals have even invested in other countries’ organizations (Scholte, 2005). Certain elements of the present scenario of globalization are similar to the outbreak in 1914 of First World War. Map of Silk Road has been given in figure 1 to indicate the route which was mainly utilized to exchange products amongst nations. Figure 1: Silk Road Map (Source: Murray, 2006) Technological developments and policy formulation that took place in last few decades have increased cross-border investment, migration and trade. This change was observed as a new phase by people in context of economic development. The world trade volume since 1950 was enhanced by 20 times. In between 1997 and 1999 foreign investment flows had doubled, to almost $827 billion from $468 billion. Thomas Friedman even stated in his studies that current globalization wave is different from earlier one. He in indicated today globalization to be farther, cheaper, deeper and faster. The present globalization wave is highly driven by policies that facilitated open economy internationally and domestically. Since Second World War and in past few decades government has implemented system of free-market economy (Bayly, 2004). This has resulted into own productive potential and even created opportunities for international investment and trade. There have also been negotiations in relation to barrier reductions and formulation of international agreements in order to promote trade in investment, goods and services. Organizations usually take advantage of foreign market opportunities and have developed marketing or production arrangements and foreign factories with foreign partners. Globalization hence can be defined as financial business and international industrial structure. Technology is another element that is a principal globalization driver (Rosenberg, 2005). Information technology advancements have brought forth significant changes to economic life. This kind of advancement has provided all economic actors like businesses, investors or consumers with tools for exploring or identifying economic opportunities. It even encompasses more informed and rapid economic trend analysis, easy asset transfer, and collaboration with foreign partners. There are numerous arguments raised against globalization. Proponents of this concept states that it enables poor countries and citizens to raise living standards and develop economically (Bhagwati, 2002). On the contrary, opponents argue that international free market has been advantageous for Western world’s multinational firms at the expense of local culture, local people and local enterprises. Globalization resistance has gained importance at governmental and popular level as governments and individuals try to manage labour, goods, capital and idea flow (Clark, 2002). In overall context, globalization can be defined as international integration resulting through interchange of products, world views, cultural aspects and ideas. The occurrence of globalization is determined through analysing proximate and distal causes. In 19th century large scale globalization was witnessed. Archaic globalization can be stated as a phase in globalization history that indicates globalizing developments and events from earliest civilizations to 1600s. This keyword means relationship between states and communities and mechanism of their development through social norms and geographical idea disperse at regional and local level. Three main prerequisites are usually outlined which led to occurrence of globalization (Chandler, 2004). Eastern origins idea is the first one that states how Western states has implemented and incorporated principles of East. Traditional ideas coming from East had enabled emergence of Western globalization. The second factor is distance. In earlier years interactions did not exist on a global scale but remained confined to Middle East, Asia, few parts of Europe and North America. During early globalization it appeared to be quite complex for states in context of interacting with those which did not exist within close proximity (Evans, 1997). Technological advancements supported states to know about others existence and proved to be another step which led to occurrence of globalization. The third factor is related to regularity, interdependency and stability. For instance if a state is not at all dependent on another region then they would not be mutually affected. This force eventually drives global trade and connections without which globalization would not have emerged and states might have remained highly dependent on own resources and production facilities. Archaic globalization to certain extent was not similar to modern globalization. This is because states were not that much dependent on one another as it is observed in present scenario. Multi-polar nature at times is associated with the concept of archaic globalization as it included participation from non-Europeans (Falk, 1999). Great Divergence that took place in 19th century highlights this nature, during which Western Europe stood ahead of all countries across the globe in terms of economic output and industrial production. Archaic globalization phenomenon was even observed in other Old World Centres such as China, Japan, Bengal and Gujarat. The German sociologist and historical economist Andre Gunder Frank stated that globalization resulted due to advent of trade links between Indus Valley Civilization and Sumer in third millennium B.C.E. Archaic globalization has its presence from Hellenistic Age that indicates commercialized urban centres encompassing Greek culture. This tradition reached from India to Spain involving Alexandrine and Alexandria cities (Giddens, 2003). Greece’s geographic position and need for importing influenced Greeks to indulge into maritime trade. In ancient Greece trade was totally unrestricted and the state only controlled grain supply. Joseph Schumpeter stated that if 1492 and 1498 mark presence of global trade economy then there is bound to be evidence of decline in transport costs, trade boom across route of Euro-Asian trade and commodity price convergence. The cod prices in Spain during 1505 to 1650 have been outlined in figure2. Figure 2: Spain - real dried cod prices (Source: Stiglitz, 2003) It is highlighted in figure 2 that cod prices in Spain witnessed fluctuation during the mentioned period. During initial stage of seventeenth century freight costs was £ 30-32 per ton from Europe on an East-India round trip voyage. The per-trip cost per ton did not include cost of permanent fleet and it clearly reflects that there was no such decline in transport costs. Freights costs on the other hand appeared to be more during 1720s and 1730s in comparison to 1660s and 1670s (Gills, 2000). In 1760s freight cost increased dramatically. Figure3 outlines freight rates during 1702 to 1760 of some fine goods like textiles. Figure 3: Real Textile Freight Rates (Source: Murray, 2006) Freight rates shown in figure 3 does not show any decline on large-scale routes of textile trade during 18th century between Europe and India. Age of Commerce does not show any evidence of Euro-Asian trade route’s transport revolution. The second era demonstrates nineteenth century during which there was a remarkable decline in international transport costs. International freight rates collapsed in 19th century, railroads penetrated interiors and Suez Canal linked continents. The impact was not only witnessed on Atlantic ports but even on Egyptian and Black Sea ports. Asia was also one of the participants and shipping rice rate to Europe from Rangoon decreased to 18.1 percent from 73.8 percent (Held and McGrew, 2002). Japan and China were even actively involved in transport revolution of Asia. Between 1880 and 1910 freight coal rate decreased to 76 percent which was mainly between Shanghai and Nagasaki. Figure 4 highlights productivity improvements in Atlantic economy on transport costs. Figure 4: Freight Rate Indexes (Source: Stiglitz, 2003) As per figure 4, after 1830s the fall in North Index had been accelerated and it was fairly stable until mid-century. North freight index between 1870 and 1910 observed a drop by 41 percent, and British index during the same period fell by 70 percent. These reduced costs in context of Atlantic transport states that it was an opportunity for states to enter into trading with one another. Tariffs associated with manufacturing also declined drastically and it enabled free trade across numerous countries. In 1870 wheat prices at Liverpool exceeded that of Chicago but in the later stage price gaps between these two regions declined rapidly. The price convergence which was occurring in Anglo-American wheat markets had its implications in other food stuffs. There was delay in price convergence in relation to some products such as meat, cheese and butter. This was due to need for refrigeration that took place in modern times. Price gaps between Asia and Britain were decreased with Suez Canal completion. This was facilitated through switch to steam from sail, and advancements in productivity on sea lanes of long distance. There were simultaneously such price falls observed in Asia, Mediterranean regions, Rangoon, London, etc (Hay and Marsh, 2000). This finally resulted into creation of a global market mainly for grains such wheat, rice, etc. The price convergence which was observed after 1870 had its roots engraved in half century before. Proto-globalization or early modern can be stated as a period in globalization history spanning between 1600 and 1800. This concept was introduced by Christopher Bayly and A.G. Hopkins. Proto—globalization stands for increased cultural exchange and trade links immediately preceding modern globalization period during 19th century. In 17th and 16th centuries this term reflected increase in maritime European empires. They were Spanish and Portuguese empires, British and Dutch empires. World trade was more developed in 17th century when chartered companies Dutch East India Company and British East India Company were established. Modern globalization is highly distinguishable from early modern globalization in terms of global management trade, expansionism, and information exchange level. This period is outlined by trade arrangements like hegemony shift to Western Europe, East India Company, Thirty Year War or large scale conflicts amongst powerful nations, increased new commodities like slave trade, etc. Triangular trade facilitated Europe to take resource advantage in western hemisphere. The exchange of epidemic diseases, plant crops and animal stocks linked with concept of Alfred Crosby’s Columbian Exchange played a critical role within the process. Early modern communications and trade also encompassed a large group like Muslim, European, Southeast Asian, Indian and Chinese merchants. 19th century highlighted the concept of globalization through industrial revolution. This enabled standardized household goods production utilizing economies of scale. On the other hand, commodities demand was sustained through growth of rapid population. Reduction in transport costs enabled more nations to join the international trade business. Advancement of commerce globalization occurred due to shipping containers invention in 1956. Aviation had become affordable since 1970s, specifically to developed countries middle class segment. Low cost carriers and open skies policies had supported to bring in competition within the market. Communication networks of low cost reduced communicating cost amongst different regions. In early 20th century and late 19th century, connectedness of culture’s and world economies expanded very rapidly. During 1990s private capital flows increased in developing countries. Foreign direct investment to certain extent enhanced the overall procedure. Bank credit and portfolio investment had risen but it was volatile by nature as it fell down drastically in late 1990s. The movement and migration of individuals is a prominent factor in globalization mechanism. Labour force migration percentage between 1965 and 1990 almost doubled. This migration majorly took place between least developed countries and developing countries. Globalization process witnessed a slight slowdown in early 2000s when industrialized world had entered into Great Recession. Globalized society usually offers a web of factors and forces that bring markets, cultures, practices, beliefs, and people into close proximity of one another (Stiglitz, 2003). Globalization has increased national economy interdependency and in turn increased the rate of cross-border movement of goods, technology, capital and service. It can be stated that local business has suffered from international trade practices but this practice even brought forth significant advancements. Economic stability of a country to large extent is dependent on interactions of one state with another. National strength is measured in terms of wide array of factors and cross-border trade is one such element. Conclusion As per this study globalization is considered to be international integration or desire to move beyond national and domestic markets. This movement is observed in different markets across the globe which facilitates interconnectedness between regions. Globalization has not only gained significance in the form of international trade but even represents cultural exchange. The term globalization came into existence many years back. However its current trend is totally different from the one that took place many years back. During First World War and Second World War some form of trading between regions was highly prevalent. This trading was mainly done to highlight strength of one state over another than to proclaim interconnectedness. Many scholars’ states that global trading basically started when there was a decline in transportation costs or there existed price convergence. Though it has been argued by many that seventeenth and eighteenth century was the starting phase of globalization but no such evidence is found which outlines decline in costs. It has been observed during 19th century there was significant movement of goods that led to the trend of globalization. Price gaps declined in this period and transportation costs also decreased. Many regions took advantage of this situation and started to actively participate in international trade. This trend then gained importance within the society and technological advancements further facilitated growth of globalization process. The overall historical perspective of globalization has been properly demonstrated in this study. References Bayly, C. A., 2004. The birth of the modern world: 1780-1914. Oxford: Blackwell. Bhagwati, J. N., 2002. Coping with antiglobalization: a trilogy of discontents. Foreign Affairs, 81 (1), pp. 90-134. Chandler, D., 2004. 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International Politics, 42 (1), pp. 34-65. Scholte, J. A., 2005. Globalization: a critical introduction. UK: Palgrave Macmillan. Stiglitz, J. E., 2003. Globalization and its discontents. New York: W.W. Norton. Read More