To What Extent Is Globalization a New Phenomenon - Essay Example

6 May Whether the globalization is a new phenomenon? According to Bordo et al (2003), globalization refers to international assimilation in capital, commodity and labour markets. Employing integration in these markets as the benchmark, it is obvious that globalization is not a new phenomenon. The first ever step in the direction of globalization is the action of “old” industrial nations, which harmonized market-dominated internal economic policies with gradually more liberalized trade under the General Agreement on Tariffs and Trade (GATT). There are many points of view about this, especially as to whether it symbolizes something “novel” or a new epoch or merely the most recent and not essentially most important phase in a long historical development. This argument has both an empirical and conceptual aspect. It is debated on the one side that developments and trends connected with the globalization process cannot be compared with the substantiation of internationalization of free flow of products, labour and capital and economic intercourse during the late nineteenth century. According to Dicken (1992), many studies have corroborated that free flow of products; capital and labour were greater in the phases up to First World War than during the last quarter of the twentieth century. (Veltmeyer 13) Further, supporters of globalization are of the view that prior types of this internationalization were not companioned by any extent near the same magnitude of the economic assimilation, and hence it did not end in the formation of an integrated global manufacturing system. Theorists of globalization argue that the whole gamut of change has been buttressed by the enhanced technological process, supported by the increasing role of the multinational corporations and assisted by liberalization and deregulation of market all over the globe. (Griffin and Khan 59-66). These theorists assert that the difference between the present and the past is in the technological conditions of this globalization (a transformation in communication technology and its appropriate policy and institutional frame work (reforms in a free market, measures like structural adjustment) and the magnitude of systematic assimilation or integration. (Veltmeyer 13) When compared to progress during the industrial revolution and the reforms introduced during and after the First World War, the current globalization process has come with liberalization of free flow of products, capital, services, information and technology. Further, there has been deregulation in associated economic atmospheres and markets. Hence, these imply that globalization is a distinct and a new phenomenon without any iota of doubt. (Veltmeyer 13) The main forces that have pushed global assimilation have been liberal economic policies, broader political changes and technological innovations. The chief driving force of globalization is the technological innovations that have enhanced the speed of communication and transportation and minimized their costs. These include the invention of the jet engine and its universal usage for speedy transporting both people and products and the usage of containerization in the international maritime trade. One another chief advantage is the transformation in information and communication technology. There has been a profound economic and socio-economical transformation due to introduction of new products like the microprocessor, the mobile phone and the personal computer and the internet. (WTR 15). Further , globalization has introduced transformations in the manufacturing process which, in fact, created new tradable products like plastics or made the manufacturing process more effective and efficient ( just-in-time techniques) or expanded global production in food (green revolution) Further, globalization has ushered a transformation from coal to gas and oil in industrial nations, which was also a significant step towards globalization thereby providing a cheap and a large source of energy to kindle economic development. (WTR 15). A salient feature of globalization is the liberalized economic policy which resulted in elimination or reduction of restriction on international trade and deregulation of international financial transactions and trade. Due to globalization, restrictions in balance –of-payments were relaxed and currencies have become convertible. Further, globalization has resulted in a range of actions right from simplification, removal and reduction of governmental restrictions, privatization of government owned enterprises and liberalization in industrial sectors to kindle competition. It would be remiss to keep out the part played by the IMF (International Monetary Fund), the GATT, now WTO and the World Bank which are playing an active role in the progression of globalization. (WTR 16). Globalization is offering many advantages and some are listed below; Now, the consumers are having a broader choice of services and products at lower prices. FDI and capital can flow to nations, which require it for their economic development and growth. To the magnitude, that technology is embedded in capital products or is closely associated to FDI flows, openness further kindles the development prospects of developing nations. Permitting the workers to move across national frontiers can mitigate skill shortages in receiving nations or enhancing dependency ratios in fast ageing society or can enhance dependency ratios in rapidly ageing societies while lessening under-employment or unemployment for these workers. Further, remittance from overseas employees or emigrants can symbolize a vast portion of national income of these nations. According to Pew survey conducted on the international level in 2007 indicated that many nations were of the opinion that globalization was really causing benefit to their nation. However, there are also threats imposed by globalization like some feel that there exist some threats to their environment, culture and threats posed by immigrants. This survey also revealed that there is obviously robust support for trade liberalization in emerging economies rather than in industrially advanced nations. (WTR 17). Trade in goods and services have also increased dramatically due to globalization. It now makes solid economic sense for MNC to operate anywhere in the world and the world has become a global village with no frontiers at all as now, Ford is manufacturing car in India and Nike is making shoes in Vietnam. As per Bank for International Settlement, the forex trading was accounted in the millions of dollars in 1900. However, in 1998, the forex trade was accounted as $650 billion per day, and it escalated to $1.8 trillion per day by 2004. (WTR 17). Under Globalization, the role played by WTO is significant as it is being involved in arbitrating the disputes between the member nations. There have been complaints from developing nations that developed nations are still practicing protective measures to their domestic agricultural and industrial products like offering subsidy, duty free incentives, levying higher tariff for imports mainly to safeguard the local industries. It was alleged by the developing member nations of WTO that U.S. applied its prohibition on shrimp imports unreasonably. WTO banned this practice and found U.S. guilty of banning shrimp imports from Malaysia, India, Pakistan and Thailand which it considered against the free flow of goods and products under globalization. (WTR 18). It has been demonstrated that the new epoch of globalization from 1980’s onwards varies as it involves larger magnitude of nations and people. There has been an outstanding increase in trade quantum from 1840 to 1975 and finds that “the value of barters between the most backward or remote regions and the most advanced industrialized economy had increased six times. (Hosbawm 50). Earlier, the famous Silk Road joined two distant powers namely china and Rome but today, the financial centers of the world are joined with markets throughout the globe. (Germain 1997). The present process of globalization offers the chances for formerly blocked and economically weak societies to attain poignant advantages by presenting themselves to the international markets but also raises some questions about cultural ramifications. Thus, the contemporary globalization is different since the scope of standardization and sameness that has followed the present round of globalization. According to Hobsbawm, there is a vast variance between the globalization process as one witness as of today with that of in the earlier century. What is most salient about it in the latter 20th century is a global standardization which travels beyond the merely technological and economic repercussion. (Hobsbawm: 65). The contemporary period of globalization has also opened the gates to exchange cultural practices and traditions, an opportunity adopted by many around the globe. Due to globalization, the globe is becoming homogenous as there has been a mixture of international film, music and culture exchange is no doubt is on the increase. One can also now witness the global wide reputation of Pepsi, Coca-Cola, or the ample availability of ethnic cuisine around the world to comprehend that fashions and trends are turning more globalized now. Globalization in fisheries resources are certainly new in the sense as globalization is wielding greater sway on fishery stock and as a result demands new political solutions and governance approach. (Taylor et al 5). One another most contentious issues pertaining to the effect of globalization is its propensity to generate uneven outcomes between developing and developed nations. Despite this criticism, Dollar and Kraay (2004) vehemently argue that globalization has, in fact, done good for the poor. The best example is China and India as they are now emerging as strong economies after espousing the globalization process. However, whether globalization per se is accountable for the bulging gap between poor and rich nations remains as a repugned issue. Conclusion One another question posed by eminent theorists is whether the globalization is a new phenomenon, or whether it is a continuously evolving process? If one go through the earlier for and against the argument for whether the globalization is a new phenomenon, one can come to the conclusion that it is definitely not a wholly a new phenomenon as it is obvious from the post Second World War era to that of the current era of globalization what Pieterse means to as “ contemporary accelerated globalization” which definitely differs from the previous epochs of globalization including the period of industrial revolution and the post era of First World War in several aspects. (Pieterse 16). Works Cited Germain, R D. Globalization and its Critics: Perspectives from Political Economy. New York: Palgrave Macmillan, 1997. Hobsbawm, E.J. The Age of Capital, 1848-1875. New York: Mentor, 1979. Griffin K & Khan A R. “Globalization and Developing World: An Essay on the International Dimension and Development in the Post-Cold War Era, “Occasional Papers no.2, 1992, 1. Pieterse, Jan Nederveen. Globalization and Culture. Global Mélange. New York: Rowman & Littlefield, 2009. Taylor W.W, Schechter M.G & Wolfsan, L.G. Globalization: Effects on Fisheries Resources. Cambridge: Cambridge University Press, 2007. Veltmeyer, Henry. Globalization and Anti –Globalization: Dynamic Changes in the New World Order. New York: Ashgate Publishing, 2004. World Trade Report. Globalization and Trade. New York: WTO Publications, 2008. Read More