The Current Era of Globalisation with the First Age of Globalisation - Essay Example

Client’s inserts his/her name Client inserts tutor’s name Subject of Study Date Globalization Introduction Globalization is the process whereby various economies of various countries in the world become more connected to one another (Martin 2005).Martin 2005, further argues that; globalization is where many business enterprises are carried out in many different locations across national boundaries. Globalization is a continuous process through which different traditions and culture, societies, and economies integrate with one other on a global scale through interchange of ideas and communication. Current era globalization came into existence after the World War II. One of the main contributing factors for this was the plan by the world leaders to break down the boarders to foster trade relations between neighboring nations and beyond. It was also in this period that countries like India, Indonesia and Sri Lanka and some countries in South America gained independence. Thus, these countries started having their own systems of the economic and established trade relations with the rest of the world. In this regard, United Nations Organization (UNO) was established (Abdul-Rashid,1993, p. 122). The economic scenario of the world gradually strengthened this lead to better trade relations and communication between these countries. Other factors which put positive impact on globalization include; promotion of free commerce and trade, creation of global corporations, reduction of transport cost, development of infrastructure, blend of culture and tradition across the countries, abolition of various double taxes, tariffs and capital controls, development of global financial systems and increased role played by international organizations such as WTO and IMF that deal with international monetary transactions. Creation of the World Trade Organization was a major contribution to globalization as it led to establishment of a uniform platform used to settle trade and commercial disputes between countries. The first era of globalization, according to Findlay, began with the unification of the central Eurasian land mass by the Mongol conquests and the reactions this aroused in the sedentary civilizations that they were launched against. Among other things, it brought awareness to the Europeans of the civilizations of East Asia and a strong desire to reach them by going around the Islamic world (that had for so long stood in between). In turn, that brought forth the effort to improve naval technology which enabled the European voyages of discovery. Comparison between First Era Globalization and Current Era Globalization The overarching feature in the first age globalization was “frozen” world order, as Thomas Friedman the journalist referred to it. In the current era globalization the overarching feature is integration. Perceives the world as an increasingly interrelated place, a dynamic process through which different economies, societies, traditions and culture integrate in a way that is enabling nations-states,corporations and individuals, to reach around the world further, faster, deeper and cheaper than ever before. With regard to the driving idea, the first age globalization was driven by the clash between communism and capitalism whereas the current is driven by free-market capitalism. Globalization in the current era has been driven by multilateral Trade Negotiation Rounds, originally under the auspices of GATT (General Agreement on Tariffs and Trade) and the WTO (World Trade Organization), which led to series of agreements to repeal restrictions on “free trade”. The set economic rules for the first age globalization varied with the type of society. Less developed societies focused on national industries; developing societies focused on export-led growth; communist countries, autarky and western countries regulated trade. In the current era globalization the set economic rules are opening, deregulating and privatizing the economy. Takis Fotopoulos, an economist, refers to this opening and deregulation of commodity, capital and labor markets as “economic globalization”. In the first age globalization there was no globally dominant culture. In the current era globalization, the dominant culture is what Thomas Friedman, a journalist; referred to as “Americanization”. Converse claimed in 2010 that globalization was driven by the outward flow of economic and cultural activities from the United States, understood as Americanization or Westernization. For example, the most successful global food and beverage outlets are American companies, McDonald’s and Starbucks (Abdul-Rashid, 1993, p. 122). The defining technologies in the first era globalization were the nuclear weapons and Second Industrial revolution. In the current era globalization, the defining technologies include computerization, digitization, miniaturization, satellite communications, fiber optics and the internet. Martin 2005, further argues that in the 1990s, growth of low cost communication networks which cut the cost of communicating between different countries which led to high economic growth rates in various countries engaged in trade. More work can be done using a computer without regard to location. This includes software development and accounting. Internet is both a product and a catalyst of globalization. This growth enhanced worldwide e-commerce, as the global business-to-business and consumer transactions have greatly increased (Daniele & Simona,1999, p. 335). The demographic pattern characterizing the first age globalization was frozen movement from East to West and a more steady movement from South to North. On the other hand, the current era globalization demographic pattern is characterized by rapid movement from rural agrarian contexts to urban, and even globally integrated contexts (David, Joakim, & Richard,2008, p. 276). People move in search for jobs, market for goods and services and also for investments. Balance between the U.S and USSR was the defining power in the first age globalization. Meanwhile, the defining power in the current era globalization is balance between states and states, states and supermarkets (millions of investors moving money around the globe), states and super-empowered individuals (individuals able to act on a world stage unmediated by the state). The defining document in the first age globalization was The Treaty. For instance, the Uruguay round led to a treaty that created the WTO, to mediate trade disputes. Other bilateral trade agreement, include the North American Free Trade Agreement and Europe’s Maastricht Treaty. In the current era globalization the defining document is the deal. The only anxiety defined in the first age globalization was nuclear annihilation. In the current era globalization, anxieties include fear of rapid or dramatic change brought on by anonymous and uncontrolled forces. These may lead to adverse economic conditions, forcing governments to impose austerity policies to reduce budget deficits (Angela & Little, 2009, p. 173). The Cold War may have slowed the process of globalization, but after the Second World War major governments came up with an agreement to lay down the framework for international commerce, finance, monetary policy, and the founding of several international financial intended fast track economic growth, offer simplified multiple rounds of trade opening and lowered trade barriers between the countries. In conclusion, the current era globalization is far much effective than the first age globalization. Advantages of globalization Globalization offers greater employment opportunities for people. The global workforce, the international labor pool of immigrant workers and those employed by multinational companies connected through a system of networking and production, is competitive as ever. This has led to poverty reduction. Additionally, availability of greater variety of goods and services to consumers as a result globalization has resulted to great increase in world production and output. Globalization has widened to international levels the market for the various business entities as a result of the Increase in international flow of capital including foreign direct investment. Additionally, there has been faster and wider spread of new technologies across the different continents of the world which has led to increased use of computers globally; internet has enhanced e-commerce, communication satellites and telephones (Rajneesh, 2004, p. 150) Lastly, globalization has made companies to be able to achieve lower costs while maximizing revenue. Consequently, various double taxes, tariffs and capital controls have been abolished and the resulting development of infrastructure has greatly contributed to reduction of transport costs thereby leading to increase in competitive price amongst the competitors thus lowering prices of commodities. Disadvantages of globalization Amongst the disadvantages that have been associated globalization include the hampering of the development of less developed countries. Considering the fact that the main export of poorer countries is usually agricultural products but the developed countries often subsidize their farmers which lower the market price for foreign crops, the developing countries have been impacted negatively as a result. Weak labor unions as a result of globalization have surplus in cheap labor coupled with an ever growing number of companies in transition weakened labor unions in high-cost areas. Unions lose their effectiveness and workers their enthusiasm for unions when membership begins to decline. Additionally, Countries have become increasingly dependent on other countries in order to meet their needs for goods and services as a result of globalization. Adverse economic condition and recession in one country can escalate to other countries and may even take global proportion within a short time thanks to globalization. Globalization has also led to environmental issues such as global warming, climate change, global water crises, inequity in energy consumption and energy conservation, transnational air pollution and pollution of the World Ocean, overpopulation, world habitat sustainability, deforestation, and biodiversity and species extinction. Also, globalization has led to faster spread of infectious disease in human beings, animals and plants. Such infections may be carried through people or even goods References Abdul-Rashid, A. (1993). Countries Habitat International, Vol. 17, No. 3, 115-124. Angela W., Little, A. (2009). Successful globalization education and sustainable development International Journal of Educational Development, Vol. 29, No. 2, 166-174. Daniele, A.,& Simona, I. (1999)The policy implications of globalization of innovation. Research Policy, Vol. 28, No. 2–3-, 317336. David, G., Joakim, G.,& Richard, K. (2008).Surviving globalization Original Research Article Journal of International Economics, Vol. 74, No. 2, Martin, W. (2005).Why globalization works (New haven and London: Yale university press). P.157 Rajneesh, N. (2004). R&D collaboration by SMEs: new opportunities and limitations in the face of globalisationTec novation, Vol. 24, No. 2, 153-161. 264-277. Read More