The Impact of Globalization - Essay Example

The Impact of Globalization The significant technological advances that have been made in the past few decades have made it increasingly possible for the world to ‘shrink’ down in conceptual scale, enabling people in China to discuss the weather with people in the United States in real time and with very little expense or effort. National boundaries are disintegrating as people in India find jobs working for corporations in the United Kingdom and cultural groups have started to lose their sense of individuality as the world’s civilizations become more ‘Westernized’ with the onset of full-scale capitalism as the new ruler of the world. This globalization process has been strongly debated in the media, political and social circles for the past several years. If one includes colonialism as an ancestor of the process, one could say the debate has raged for generations. The International Monetary Fund defines globalization as “a historical process” involving “the increasing integration of economies around the world, particularly through trade and financial flows” (International Monetary Staff 2002). Globalization is typically considered a necessary and unavoidable process leading to future world economic development. However, many have criticized the process because it tends to exacerbate present inequalities that exist within and between nations, threatens the employment and living standards of individuals in all countries and prevents the natural social progress with which each of these countries have been engaged. It seems clear that even though the process is unlikely to change or to reverse, very few people are likely to benefit from the process called globalization. The ways in which many organizations conduct business have changed dramatically under the concept of globalization. It is the survival strategy of the marketplace to continuously strive to increase efficiency within the workplace by producing the greatest quantity of products with the least expenditure of resources. As globalization continues, this is also changing the way in which companies conduct business, such as through the concept of the value-added chain. “In its most basic form, a value-added chain is ‘the process by which technology is combined with material and labor inputs, and the processed inputs are assembled, marketed, and distributed” (Gereffi, Humphrey & Sturgeon, 2005). By outsourcing many activities and production processes to less developed countries and marketing to more developed countries, many corporations have also sought to reduce restrictions and licensing expenses through sometimes highly complex business relationships with subsidiaries and smaller corporations. “Global markets offer greater opportunity for people to tap into more and larger markets around the world. It means that they can have access to more capital flows, technology, cheaper imports and larger export markets” (International Monetary Fund Staff 2002). Although the idea of globalization sounds like an ideal situation for the increased flow of goods and currencies throughout the world, as well as a possible solution for the redistribution of wealth into some of the world’s most destitute countries, “in practice, this has meant that the governments of the advanced capitalist countries, along with the I.M.F., the World Bank, and the W.T.O., have increasingly sought to force other nations to adopt market economies, privatize public companies and resources, abandon labor and environmental regulations, reduce social services, and embrace ‘free trade’ and the free movement of transnational capital” (Smith 2002). While it seems that much of the globalization effort is organized by the big businesses based in the Western capitalist countries, an exception to this can be found in the case of Burma, whose native population has been almost entirely subsumed under the masses of wealthy Chinese that have taken it over (Chua, 2003). While the International Monetary Fund (2002) argues that “globalization offers extensive opportunities for truly worldwide development,” they also admit that the increased efficiency and division of labour does not necessarily benefit everyone involved. As Chua outlines in her article, the increased ability for larger corporations or wealthier individuals to move into smaller markets is facilitated to an even greater extent when these begin to gain political power through their increasing wealth. They then begin bringing in their greater resources, greater capital and greater ability to undercut their competitors, making it more and more difficult for smaller businesses, or, in the case of Burma, mostly agrarian natives, to survive the globalized marketplace. Rather than leading to an increased diversification in the market, as well as the associated opportunities for employment and competitive salaries, globalization is beginning to decrease the ability of local citizenry to find adequate support outside of the multi-national corporation and opportunities for entrepreneurship dwindle. “As we all search for the best deal for our consumer dollars, regional superstores and on-line shopping drives our Mom and Pop shops, local manufacturing and local service companies out of business. As local businesses close their doors, the number and diversity of local jobs decrease” (Salmons & Babitsky 2002 p. 4). Despite the apparent threat to local businesses, developing nations are eager to accept the influx of big business as the international corporation operating in the right third world country can substantially increase the GNP. This overall perception of economic growth for these countries has been historically demonstrated. “In the inter-war era, the world turned its back on internationalism … and countries retreated into closed economies, protectionism and pervasive capital controls. This was a major factor in the devastation of this period, when per capita income growth fell to less than 1 percent during 1913-1950. For the rest of the century, even though population grew at an unprecedented pace, per capita income growth was over 2 percent, the fastest pace of all coming during the post-World War boom in the industrial countries” (International Monetary Fund Staff 2002). This type of phenomenal growth was attributed directly to the increased interactions that had grown between countries as a result of international business and financing. “Outward-oriented policies brought dynamism and greater prosperity to much of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as living standards rose, it became possible to make progress on democracy and economic issues such as the environment and work standards” (International Monetary Fund Staff 2002). Thus it was perceived that globalization offers tremendous opportunities for truly worldwide development but it has finally been realized that this growth is not progressing evenly. Because companies expand into new markets based on how well that market can meet their own needs, this process sees some countries becoming integrated into the worldwide economy much faster than others. As would be expected, those countries that have been able to integrate are seeing faster growth and reduced poverty. “A larger number of developing countries have made only slow progress or have lost ground. In particular, per capita incomes in Africa have declined relative to the industrial countries and in some countries have declined in absolute terms” (International Monetary Fund Staff 2002). In addition, the growing power of these corporations as they come into developing nations has had a wide impact on the policies and restrictions that are created. The effect of having less restrictions in terms of humanitarian, environmental and operational procedures has led to an economy that rewards cutthroat business practices at the cost of a great deal of progress in these areas made in more advanced countries. Of course, all this change filters down to ultimately affect the individual citizens in a very real way. No longer sure of their livelihood thanks to increased competition for less jobs available, the globalized economy has made it difficult, if not impossible, for the poor to dig their way out of their poverty while increasingly helping the wealthy add to their fortunes. In addition, the jobs that do become available are not always jobs that would be open to local residents as they might require skills or knowledge that were not previously necessary. “Those with jobs know that they could lose them at any time. Downsizing by companies moves the bulk of workers into contract and temporary employment” (Salmons & Babitsky 2002). This increased competition for jobs has led to a Westernized way of living that places emphasis on fast lifestyles and a constant pressure to keep up with the latest advancements and social opportunities in order to have a chance at the best jobs. “In this world of intense competition, social networking is everything. Who you know and how they can help you is the coin of the realm. The result is that we increasingly isolate ourselves into gated communities and exclusive membership organizations” (Salmons & Babitsky 2002). Those who wish to advance in life know they must do so by sacrificing family values and traditional belief systems in order to fit in with the correct social crowd to obtain the types of employment that will provide them with the lifestyle they have been told is best. Increasingly, the world is operating upon a Western definition of the ideal life, neutralizing cultural differences in an effort to be politically correct and to avoid cultural clashes and changing the roles of family members to bring them into the capitalist ideology. The pressure to become a part of this infamous ‘rat race’ filters quickly into the society, realized by adults and then distributed down to the children. “Parents increasingly feel that they must help their kids learn how to get in the race as early as possible to increase their chances for the best jobs and a good life in the future” (Salmons & Babitsky 2002). Those who don’t fit into the model, who don’t buy into the set standard ideals or who refuse to relinquish their cultural heritage for the benefits associated with blending in are quickly lost to the bottom of the income stack. “The gap between social classes widens as a result of this voluntary sorting” (Salmons & Babitsky 2002). With the ill effects of globalization acutely felt in some areas of the world, it might be questioned as to why any organization, nation or individual would consider encouraging its spread. However, it could be argued that globalization has been in existence ever since the first two countries established communication with each other. The only difference now is that the advances in technology and communication have enabled business to be conducted over longer distances in less time, enabling this kind of interaction to occur regardless of geographic location. In addition, there are benefits to be gained through globalization as countries such as Asia see dramatic improvement in their GNP, which is further transferred down into the general populace. Although there is still poverty in these nations, it can be argued that the poor are living better quality lives as a result of the influx of capital and resources. The question, then, is not how to stop globalization, but rather how to make globalization work in such a way that it does not break down the cultural ideals, family structures or provide corporations with unchecked controls over developing nations even while it works to benefit the world economy. Works Cited Chua, 2003. Gereffi, 2005. International Monetary Fund Staff. “Globalization: Threat or Opportunity.” International Monetary Fund. (January 2002). November 5, 2009 Klein, 2000. Salmons, Jim & Babitsky, Timlynn. “Shamrocks and Nanocorps: Business Model and Technology Innovation to Bridge the Digital Divide.” 2002 Northern Montana Technology Exposition [keynote presentation]. (March 23, 2003). November 5, 2009 < http://sohodojo.com/mt-tech-expo-scripted.pdf> Smith, David Michael. “The Growing Revolt Against Globalization.” Impact Press. (August / September 2002). November 5, 2009 Read More