What is Globalisation - Essay Example

What is globalisation? Globalisation, although only recently popular, is not a new concept. Most people do not understand what globalisation is and it is approached as if it’s a taboo subject, almost entirely out of humanities control. However, globalisation has been around for centuries at best and life as we know it today is a result of changes that have occurred over an extremely long period of time. Classifying globalisation itself is not an easy task because the term is used in relation and correlation with a myriad of processes. Most people take the idea of globalisation to mean the spreading similarities amongst nations; the concept does not just adhere to this alone though. In its most basic form globalisation can refer to a process whereby similar events take place in more than one part of the world simultaneously. These events are not mere coincidences but are connected to one another and there is a consistent spread and increase in the number of connections between “discrete national entities,” (Stalker, 2000:2). This definition however, points more towards internationalization and in a strict sense globalisation transcends simple connections. There is not a doubt that the process stated above denotes the characteristics of globalisation, the missing link here is the fact that it’s one step ahead of internationalization i.e. it doesn’t just consist of countries connection at a level whereby events occur simultaneously, it literally consists of a plane at which “discrete national entities are themselves dissolving so that all major political and economic decisions will ultimately be transmitted globally,” (Stalker, 2000:2). This is a supposed new world that has taken centuries to construct. It has resulted in the literal death of geography and has made impossible the existence of a stand alone state. No country can survive without interaction with other countries at this point and time. A century ago this kind of a world could not have been imagined; the heights that have been achieved could not have been envisioned. The best example of this is China; it was a closed economy that kept itself locked from the world markets for most part in the former years. But if you look at it now, china is everywhere. You can buy anything from toasters to Chinese clothes. The communist country had resolved to keep itself shut off from the outside world but even with strict censorships and control it is now taking its place amongst the world heavy weights, and it’s here to stay. It wouldn’t be a stretch to say that if the Chinese economy was to collapse right now, the world market would suffer another crisis because almost every major market in the world is affected by the Chinese market which has become one of the main world suppliers in almost everything that can be bought or sold (Scholte, 2000). The effects of globalisation can be seen all over the world from people listening to hip hop music in Japan to Americans serving Indian samosas with coffee. Cultures have been traded along with norms, values and beliefs all over the world. It isn’t just about the world markets; the world itself has mixed within itself. In summation, the concept of globalisation can be best summed in the words of Peter Stalker who goes on to write that when speaking of globalisation we have to realise that,. “The description is of a world ever more closely bound by the flows of trade and finance. The prescription is that this is how the world ought to be – that such developments re in everyone’s interest.” (Stalker, 2000:3). This paper will look at the implications of globalisation and how it is connected to some of the most important economic concepts such as liberalism, mercantilism and Marxism. Liberalism and Globalisation Liberalism as a concept talks about the importance and places great emphasis on equality and individual freedom and liberty. The concepts of free markets and free trade are the ones we need to look at when discussing globalisation. Liberalism preachers that markets should be free and allowed to run as per the workings of the demand and supply; trade should also be free of any taxes and duties. Liberalism and globalization therefore directly relate to one another. Liberalism can be viewed as an extension of capitalist ideas i.e. freedom of trade and freedom for the markets are core concepts that capitalism thrives on. Liberalism has contributed to globalisation by aiding the transfer and shift of power and resources from one part of the world to another. The very concepts of liberalism endorse freedom to do as one pleases; ergo profiteers have traded and traded a lot over the years. However, some critics of the theory differ on its connections with globalisation. Liberalism according to them needs to be kept separate from the idea of globalisation as both have vast differences. Liberalism doesn’t just deal with the idea of freedom for a market or an economy; it deals with a much deeper understanding of the individual, one which the concept of globalization never looks upon. “It has been argued that the international system constitutes a construction which is the product of a casual chain: the rise of capitalism and liberalism caused globalization, which in turn shaped the new standard of civilization. Globalisation has pushed the world into a transitory phase. Based on the knowledge we possess today, the overthrow of what liberalism has created in the shape of globalisation seems highly improbable. Globalization can be adjusted and corrected; its disastrous consequences can also be contained and repaired. Nevertheless, it can hardly be halted.” (Mozaffari, 2002:48). This basically points to the fact that globalisation can be attributed to capitalism and liberalism, as stated before. However, these two concepts haven’t had an altogether great affect on the world. The recent world market crash is proof of that fact. Similarly, globalisation which stems from their roots has now become a colossal force, once which cannot be contained and one which is slowly eroding identity and cultures and turning them into a huge jumble. Mercantilism and Globalisation Mercantilism affected and guided European economics policies for a really long time, more than three centuries to be precise. The colonial period and the time during which countries such as the United States and Brazil acquired their independence was the time when the influence of mercantilism was at its peak. Most of the colonies bought and run by the European were done so as per the mercantilist policies as well, in order to ensure that their home country and its economics remained strong (DeWitt, 2000). Every act that stemmed from the colonial powers in this era was to benefit their nation and nothing but their nation. The motive was profit, but profit for the nation and not for oneself. The basic workings of mercantilism include free trade between states. This is the core concept that relates mercantilism to globalisation i.e. trade between two nations without taxes, embargoes or any extra costs whatsoever. The pure reason for trade being profit – this was done to ensure that the European treasuries remained in surplus to support the government and the military. It verily dictated how European colonies would later on be converted into a part of the global economy. We can see that globalisation was at work long before people even knew what globalisation was. DeWitt explains the workings of mercantilism when he writes: “Colonial, economies were organized to export raw material to the mother country, eliminating the need for purchases from rival states and providing national merchants with a lucrative re-export business when colonial production exceeded domestic needs. Colonies were markets for mother country manufactures and were discouraged or prohibited from establishing local industries or importing manufactured foods from other sates. Only merchant vessels of the mother country were to be employed in the colonial trade” (DeWitt, 2002:7). Globalisation shares many goals and aims of mercantilism e.g. it works in a way that it promotes economic welfare, globalisation also tries to improve and expand upon existing trade, it also looks to try and further develop agricultural and manufacturing assets. Mercantilism shared the same goals. There is however, a vast difference between the two. To begin with, mercantilism worked through strict government control of the entire economy that it was affecting, this strict government control in non-native areas was the result of conquests and chaos. Globalisation depends more on the market forces to join the world together than government regulation. In fact the survival of globalisation depends on as little government interference as possible in the form of taxes, duties, embargoes etc. (Fitzgerald, 2000). And in fact the idea of government having the final say in everything was in a way hampering the very basis of globalisation. The main strength of mercantilism lies in being able to control the different factors of production placed around the world. This implies that they need to not just make optimum use of their own resources but capture those around the world so that they can stay ahead of other nations. It is the idea that wealth needs to be acquired on a constant basis and needs to be expanded upon that drives mercantilism and has indirectly guided globalisation to becomes the force that it is. The factors that were curbing its growth i.e. the national interest being placed above all else, and government having control of everything also went out the window once the USA became a superpower of the world. When the United States later became part of the band wagon on which globalisation was running i.e. when Nixon declared the country as detached from the gold standard, it was then that there was a true freedom of movement for different factors of production. The changes that have taken place over the years have resulted in a massive shift in the world markets. Marxism and Globalisation Marxism is basically a theory that focuses on politics, economics and the concept of a social world view in a very materialistic fashion. In short Marxism takes the struggle of the middle class as the most important factor of social change in a society. Its main arguments work against capitalism while it advocates socialism as the ultimate market system where everything is owned, maintained and managed by public organisations. Capitalism sees the working class as an entity that controls its own destiny and fate i.e. the more they work the more they will earn. Their labour is their most valuable commodity, where as Marxism rejects this notion and says that the middle class is exploited by the upper class to maximise their profit (Rupert & Smith, 2002). The elite benefit most from the hard work done by others. As labour the middle class has no standing or say in the production process or the goods that are being produced, ergo he has no real value in the economic system, or at best, not the same value that is allotted to elitists. Marxism has an interesting take on globalisation; there is no exact school of thought that connects Marxism to globalization directly, however some theorists argue that Marxism foretold the coming of globalisation. Marxism, along with classical liberalism and the modernization theory did not give due importance to the concepts of culture, and national or ethic forms of social association. What was important in Marxism was the advent of technology and ergo the eventual progress of modern economics, technology and politics. As per Marxism these factors were supposed to spread out at a gigantic level and in a way harmonise the whole world. Each would play its part in the transformation of the world into becoming a unipolar entity from a diverse one (Martin, 2004). Marxism does not just draw globalisation out of simply capitalism as most other theories would have one believe, it makes use of both communism and capitalism to explain or point towards globalisation. The concepts of capitalism and communism were both meant to play their part in eradicating differences that were drawn up with national borders. Although Marxism is a supporter of just communism it did not use it to foretell globalisation alone. The world market created through capitalism was supposed to squash the boundaries of the modern world. Businesses and the profit motive were meant to open up the world to itself and help people cross over their fences so that they could experience new worlds and countries (and profit from their markets as well). In a way Marxism predicted as well as promoted the idea of a more globalised world. Axtmann goes onto further explain this when he says, “For capitalist ideologues, the market was going to produce a global world culture, where as for Marxism the proletariat was going to produce communism that would eliminate nationalism and create a communist international without exploitation or war” (Axtmann, 1998:35). Conclusion Globalisation in simple terms is the breaking down of the world’s boundaries, be them social, political, or economic and the world coming together to form a unipolar outlook and attitude. In terms of economics we have three different platforms which give us a deeper insight into globalisation and these three have directly or indirectly contributed to the progress and workings of globalisation as well. Liberalism talks about concepts such as free trade and free markets, globalisation is dependent on open markets in order to spread out without any hindrances. It cannot reach a part of the world that closes its docks and ports off from the rest of the world. Globalisation spreaders out to many parts of the globe mainly through the forces of economics. Mercantilism has also given roots to globalisation; by trying to maximise benefit their home state they promoted trade and in effected ended up trading not just goods but cultures along with it. Lastly, Marxism, which is primarily in negation to capitalism has also been said to have prophesized the coming of globalisation because of the way it presented the ideas of economics and politics. At the end of the day all three schools of thought seems to have aided the spread and workings of globalisation in one way or the other. It remains to be seen how it will continue to affect our world in the future. References Axtmann, R. (1998) Globalization and Europe: theoretical and empirical investigations: Continuum International Publishing Group, 1998 DeWitt, J. (2002) Early globalization and the economic development of the United States and Brazil: Greenwood Publishing Group, 2002 Fitzgerald, E. (2000) Globalizing customer solutions: the enlightened confluence of technology, innovation, trade, and investment: Greenwood Publishing Group, 2000 Martin, M. (2004) Globalization, macroeconomic stabilization, and the construction of social reality: an essay in interpretive political economy Volume 13 of Market, culture and society: LIT Verlag Berlin-Hamburg-Münster, 2004 Mozaffari, M (2002) Globalization and civilizations: Routledge, 2002 Rupert, M. & Smith, H. (2002) Historical materialism and globalization Warwick studies in globalisation: Routledge, 2002 Scholte, J. (2000) Globalisation: a critical introduction: Palgrave Macmillan, 2000 Stalker, P. (2000) Workers without frontiers: the impact of globalisation on international migration, IIS microfiche library: International Labour Organization, 2000 Read More