Globalization and Capitalism - Coursework Example

Globalization and Capitalism Lecturer: presented: Introduction Globalization is the process through which production, trade, governance and many other aspects of life have continued to be standardized across the world. The recent wave of globalization has led to the expansion of foreign industries in third world countries. Global capitalism is the situation in which industries are engaging in private investments worldwide. Trade is controlled by the market forces such as supply and demand rather than the government. This essay is a critique of the advantages and disadvantages of globalization and global capitalism. It also highlights the extent of the decline of the Nation-State as a result of globalization. Advantages of Globalization The flow of capital from developed countries has led to the development in the infrastructure in third world nations. Moreover, the standards of living have been improved through the creation of employment opportunities. On the other hand, the industrialized countries have benefited from the expansion of industries to less developed countries thereby reducing competition in the developed nations (Fiore, 2001). For example, multinational companies such as Coca-Cola, Toyota, GM, and British Airways among others have expanded their production through expanding operations to many developing countries. Trade has become liberalized and countries are benefiting from the expanded markets for their domestic products. Globalization has also led to interconnections of countries through the global mass media, which has made knowledge and information sharing possible. Infrastructure has also developed globally allowing easy movement of people and goods. Moreover, cultures have intermingled thereby sharing vital strengths that are important for development (Macionis & Plummer, 2005). In essence, as Minda (1999) argues, the world has become a global village as a result of globalization. Inter-dependence of nation states has increased, which has made it possible to avoid war especially between developed countries. Nations are coming together to accomplish common goals such as dealing with hunger, healthcare, natural disasters such as the Haiti earthquake and also offer assistance in the war torn nations such as the UN intervention in Sudan and Somalia. Disadvantages Globalization has also had negative effects such as decreased employment opportunities in the developed countries as industries shift their investments to developing countries that offer cheap labor. The inter-dependence of nations has also caused the increased risk of contagious economic crisis, such as the current economic crisis in the US that has spilled over to many nations resulting in a global economic crisis. Diseases are being spread globally as people migrate from one region to another for trade, employment or tourism among other reasons for migration (Isaak, 2004). For example, globalization has contributed largely to the spread of HIV and other communicable diseases. There is also a negative impact on culture as people from different cultures intermingle thereby loosing their original cultural values and norms. The national sovereignty is largely affected by the international organizations such as UN and WTO among others (Cohen & Kennedy, 2007). Globalization has also resulted in environmental pollution especially in the third world countries that have poor regulatory laws. Advantages of Global Capitalism Since countries are free to export as much as possible of what they produce, they benefit from their comparative advantage. In other words, a country specializes in what it can produce most efficiently and import what another country produces in the same way. Global capitalism therefore facilitates free trade, which is significant in the enhancement of the freedom of prosperity, and is fundamental to the developments that people are enjoying in the current day (Bartholomew, 2006). It has led to technological transfer as countries that have a capacity to produce technology sell it to the countries that need it to transform their raw materials in to products. For example, Kenya is one of the third world countries that have favorable climate and soils for horticulture. However, the irrigation technology can only be imported from other countries such as Israel. In this case, Israel is good at producing technology for irrigation, while Kenya is good for the flowers and hence each country benefits from the other in terms of market for the local product (Roozendaal, 1994).   Disadvantages of Global Capitalism Opponents of global capitalism argue that the autonomy of the less developed nations is under threat of the large multinational companies since they command a lot of power due to their size and wealth. The large corporations may influence national policy decisions since they are critical to the economic growth of these less developed nations. On the other hand, the focus on cheap labor is viewed as exploitation of workers who are robbed of their hard work for the benefit of the rich. James (2008) associates capitalism is associated with mental illness. For example, the driving force of the US multinational companies towards shifting their investments to the less developed countries such as Vietnam is to reduce the labor expenses since the workers in such a country demand meager wages compared to developed countries. Another disadvantage that opponents of global capitalism point out is the increased environmental pollution in the third world countries that do not have strong laws to regulate pollution. In essence, pollution is a major issue that is affecting many countries, but it can not all be blamed on global capitalism since even the third world populations have been participating in environmental degradation through clearing of forests for farming land and trading in wildlife products (Banerjee et al. 2002). Globalization and Decline of the Nation-State Globalization has led to the free movements of people across borders and the inter-dependence of countries in terms of foreign investments, labor, knowledge and technological transfer. The identity of nations is being lost as people can now change their citizenship at will. An example is the number of football players and athletes from African countries such as Nigeria, Ethiopia Ghana and Kenya among other countries who have changed their citizenship. National leaders have lost their autonomy in their own countries since their leadership style and policies are monitored in the global market. The developed countries are also loosing their employment opportunities to third world countries that provide cheap labor, which leads to reduction in employment opportunities in the developed nations (Isaak, 2004). For example, an American software company can be more profitable operating in a less developed country than it can be while operating in the US. On the other hand, for a country to create a favorable investment climate, it has to relax its domestic and foreign policies to allow foreigners to introduce capital in the economy. On the other hand, for a country to receive support from the international organizations, it has to adhere to the requirements of international bodies. For example, the IMF, UN and the World Bank have regulations that nations have to adhere to for them to receive financial support. The WTO is also an international organization that applies such strategies to enhance global trade. Even if nations are free to undertake their domestic affairs, these organizations limit their independence by determining what they should do to benefit from global associations and trade. This is viewed as undermining the nation state (Minda, 1999). For example, there are numerous trade embargos and sanctions that have been applied on countries that do not adhere to the regulations set by the international bodies, including Zimbabwe, Afghanistan and North Korea among other countries globally. Conclusion Globalization has led to the spread of industries, business and a mixture of cultures across the world. It has various advantages and disadvantages in both the developed and the developing countries. It has led to global capitalism, which has both advantages and disadvantages. However, the advantages of globalization and global capitalism are more than the disadvantages. Globalization is associated with decline of the nation state due to the continued interconnectedness of nations. It is also associated with the spread of economic crisis between countries, spread of communicable diseases as well as decline of cultural values among communities. References Bartholomew, J. 2006. We need a revision course on why capitalism is a good thing, The Daily Telegraph Banerjee, A. V., Paul J. Gertler, and Ghatak, M. (2002) “Empowerment and Efficiency: Tenancy Reform in West Bengal”. Journal of Political Economy, Vol. 110, 2 pp 239-280. Cohen, R. & Kennedy, P. 2007. Global Sociology, 2nd Edition, Basingstoke, Palgrave.  Fiore, Q. 2001. War and Peace in the Global Village, New York: Gingko Press Isaak, R. 2004. The Globalization Gap: How the Rich Get Richer and the Poor Get Left Further Behind, Upper Saddle River: FT Press James, O. 2008. Selfish capitalism is bad for our mental health: The growth in relative materialism over the past 20 years is taking a heavy toll on the wellbeing of English-speaking nations, The Guardian. Macionis, J. J. & Plummer, K. (2005). Sociology: A Global Introduction, Third Edition, Oxford: Blackwell Publishing Minda, G. 1999. Globalization, Decline of the Nation-State, and Foucault, Brooklyn Law School. Roozendaal, G. (1994), “Kenyan Cut Flower Export Blooming”. Biotechnology and Development Monitor, Vol. 20, p. 6-7. Read More