New Perspectives on Globalization and Anti-globalization - Prospects for a New World Order - Literature review Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2012 Introduction According to Griffith (2007), globalization is a concept that has often been fervently challenged and misunderstood. The concept has occupied as well as divided sociologists, anti-capitalists and economists alike. Anti-globalization protesters have been known to appear unexpectedly on almost every major meeting of the World Trade Organization, World Bank and the International Monetary Fund since the year 1999 demanding for a stop to the globalization process. In spite of this, a number of economists proclaim the benefits of improved trade, highly developed telecommunication networks and cross-border investment to developing nations, as identifying the gains that workers and unions all over the globe stand to make from globalization. As Griffith (2007) highlights, most individuals are often for or against globalization, without pausing to deliberate on what globalization exactly is and where its impacts can be seen. It might therefore be a concept too slippery to be intently defined, but it is an exciting debate worth engaging in. This particular paper therefore intends to evaluate the arguments employed by anti-globalization protestors. One of the arguments employed by those against the concept of globalization is that globalization is hurting the poor, low-skilled workers. According to Abbas (2000) anti-globalization protesters argue that individuals who are low-skilled in the more developed nations stand to lose the most as a result of globalization. Abbas (2000) further highlights that the anti-globalization protesters argue that since capital has become increasingly mobile, a number of companies (firms) have been moving their labour-intensive segments of their production processes to other nations (especially the developing nations) where wages are argued to be much lower than wages paid in the more developed nations. Additionally, trade agreements between some of the more developed nations such as the U.S and some of the less developed nations are also encouraging a number of firms within the more developed nations to relocate some of their business operations offshore. The anti-globalization protesters contend therefore that globalization is hurting the poor and low-skilled labourers in the more developed nations. Besides, the large numbers of low-skilled migrants, both legal and illegal, and who are ready to work for wages that are lower compared to those paid to low-skilled labourers within the more developed nations will further hurt the low-skilled workers within the more developed nations( Abbas ,2000). On the other hand, Daniels et al (2002) argues that low-skilled labourers within the less developed nations stand to benefit from globalization since foreign companies move their operations offshore. Anti-globalization protesters also argue that the concept of globalization is destroying indigenous businesses. According to Prasad (2003) anti-globalization protesters claim that the concept of globalization is allowing multinational firms to avoid taxes by using offshore tax as a cover up. Equally important, globalization protesters argue that globalization is also allowing multinational firms to relocate their operations quickly from nations whose rates of tax are not globally competitive. The sudden relocation of a multinational firm from a less developed nation, for instance, may have a serious prolonged effect on joblessness since in a large number of the less developed nations; the opportunity cost of labour may be zero or even closer to zero. Therefore, as argued by Prasad (2003), globalization protesters believe that the concept of globalization has seriously affected the capability of various nations to implement economic policies. Given the integration of financial markets, it becomes exceedingly difficult for various governments of a nation to practice a self-regulating monetary policy and exchange rate policies within a purely national context, a factor they argue is have a significant negative effect on indigenous businesses. A significant argument by those against the concept of globalization is that globalization is causing harm to the environment, through the exploitation of natural resources which further affecting business expansion. As highlighted by Ergil (2007), globalization protesters argue that global market capitalism is intrinsically detrimental to the natural environment as it is exemplified by the ever-growing consumption of superfluous homogeneous products, over-exploitation of natural resources as well as waste disposal problems. Cavanagh (2004) also argues that a significant feature of globalization, the export-oriented production is intrinsically detrimental as it leads to increased transportation activities globally that result in increased use of fossil fuel, packaging as well as very expensive and environmentally destructive new infrastructures such as airports, pipelines, roads, dams, canals, and so on. According to Cavanagh (2009), within the realm of agriculture, globalization protesters argue the change to the industrialized sell overseas systems also cause pesticide poisoning and genetic pollution from genetically engineered plants. Additionally, Cavanagh (2004) argues that with respect to globalization bureaucratic instruments, the concept of globalization also speeds up commodification as well as the privatization of resources that are essential to life such as freshwater; it hinders the capability of countries to come up with their own environmental and health regulations; it is a major instrument in spreading invasive species, such as the deadly mosquitoes and other dangerous organisms; it replaces homogeneity and monoculture for biodiversity; as directly serving unregulated corporate power. Another significant argument against the concept of globalization is that globalization has instigated the lowering of wages and labour standards especially within the developing nations. As highlighted by Parker (2005) in developing nations, the concept of globalization has instigated the exploitation of cheap labour especially within the developing nations where laws protecting labourers and human rights are weak or absent. As highlighted by Stern (2009), the interaction of labour standards and global trade has turned out to be a key issue in regards to the relations between the more industrialized and the developing nations in the last decade. Segerstrom (2003) argues that globalization will lead to the fall of wages especially for developing nations that embrace free trade due to the fact that increased competition between developing nations. According to Segerstrom (2003), with seventy nations competing for the export processing zone dollar, the motivation to attract investors will be increasing as wages and standards are held hostage to the threat of departure. The consequence is that the entire nations are turned into manufacturing slums and low wage ghettos for ever and ever. According to Wild (2011), anti-globalization protesters have also argued that globalization that will instigate an economic crisis. Veltmeyer (2009) highlights that not only will the major institutions of the global economic governance such as the World Trade Organization, World Bank and the International Monetary Fund be in crisis but even the deeper structures and process that were earlier viewed as an inevitable phenomenon. What was viewed by many as a functionally integrated world economy noticeable by immense flow of goods, capital and labour across borders will be presided on by global capitalist class that will give ground to a chain of financial crisis as well as a growing intercapitalist rivalries. According to Veltmeyer (2009) therefore, globalization was not just a mirage, but in retrospect, rather than being a new and higher stage of capitalism, it is in actual fact a response to the fundamental structural crisis of capitalism that was masked during the 1990s by the fall of centralized socialist regimes in Eastern and Central Europe. On the other hand, supporters of globalization, mainly intellectuals have argued for globalization on grounds that it enhances economic growth, job opportunities, world convergence and economic welfare. Multinational firms, a product of globalization are, for instance, been argued by the Pro-globalization supporters to be playing a significant role in enhancing economic globalization. The concept of Globalization is therefore argued to be significantly influencing the global trade volume and also largely responsible for the rapid growth in terms of foreign investment (Griffith, 2007). Pro-globalization supporters also argue that the concept of globalization will increase international competition, and progressively, more companies will move various segments of their production process to foreign countries in order to remain competitive. As a result of this, Pro-globalization supporters argue that multinational firms will be able to expand through mergers and acquisitions, a factor that pro-globalization supporters believe will enhance economic growth, job opportunities, world convergence and economic welfare. Griffith (2007) argues that even though globalization is putting low-skilled labourers in the more developed nations at a disadvantage, it is having a beneficial effect on the knowledge workers within the more developed nations. A number of companies from the more developed nations are increasingly employing the use of knowledge skills from other nations such as China and India to come up with a variety of services. Computer software development, engineering, accounting, chip design and web site design form some of the large number of services that companies from the more developed nations are outsourcing. Additionally, a large number of nations are bringing in knowledge workers on grounds that shortages exist. Griffith (2007) also argues that just like it is exerting a downward pressure on the wages of low-skilled labourers within the more developed nations, globalization is also exerting a downward pressure on the wages of knowledge workers in those nations. As highlighted by Segerstrom (2003), the anti-globalization protesters are very wrong about facts when they claim that there is global income inequality and that poverty has been increasing eventually. According to Waller (2010), various indexes have shown a reduction in terms of global income between the years 1980 and 2006. Waller (2010) argues further that recent globalization period has been associated with a significant drop in the fraction of the globe’s population living in poverty. In reality, the general income distribution in the world has significantly shifted to the right. In my point of view and based on the analysis above, there seems to be a serious case not against globalization but against the version of globalization that appears to have been imposed by the globe’s financial elites. The brand that is currently coming up is unnecessarily widening up the gaps of wealth and poverty, eroding economic freedom and even more failing its own test of maximizing sustainable economic development. In this case therefore, the anti-globalization protesters can be argued to be half-way right in their fight against the concept of globalization. Conclusion Based on the above analysis, there is no doubt that no economic topic has stimulated such intense passion as the financial globalization debate in recent times. Also, there is no doubt that the concept of globalization will be a significant factor in determining the economic framework for the 21st century; as a result, affecting jobs, individual’s health and lives globally. Globalization has no doubt offered unmatched opportunities in terms of economic development. However, in my opinion there is a fundamental question surrounding the arguments over globalization, essentially revolving around free trade and the free flow of capitals. Anti-globalization protesters as analyzed above may only have attained little success in disrupting meetings of the World Trade Organization, World Bank and the International Monetary Fund, but they seem to have permanently changed the terms of the arguments. What is now clear is that the captains of the globe’s economy acknowledged that the progress in the world trade and finance ought to be measured with the major standards being the alleviation of poverty and sustainable development. References Abbas, A, 2000, Globalization of Business: Practice and Theory, Routledge. Cavanagh, J & Mander, J, 2004, Alternatives to Economic Globalization: A Better World Is Possible, Berrett-koehler Series, Edition 2, revised, Berrett-Koehler Publishers Daniels, D, Radebaugh, L, Sullivan,D, 2002, Globalization and business, Indiana University. Ergil, G, 2007, What is the argument against globalization? Retrieved on April 17, 2012 from Griffith, W.H, 2007, Winners and Losers in Globalization, Journal of Economic Issues Parker, B, 2005, Introduction To Globalization And Business: Relationships and Responsibilities, SAGE. Prasad, E, 2003,Effects of financial globalization on developing countries: some empirical evidence,4(32),p145-156, Journal of International Business Studies. Segerstrom, P.S, 2003, Naomi Klein and the Anti-Globalization Movement, Retrieved on April 17, 2012 from Veltmeyer, H, 2008, New Perspectives on Globalization and Anti-globalization: Prospects for a New World Order? The International Political Economy of New Regionalisms Series,Ashgate Publishing, Ltd Waller, K, 2010, Globalization and Global Financial Crises, Retrieved on April 17, 2012 from Wild, J, Wild, K, Jerry, C & Han, Y, 2011, International Business: The Challenges of Globalization, Edition 6, illustrated, Pearson Education, Limited. Read More