The Impacts of Globalization on Individuals, States, and Systems - Essay Example

Introduction Globalization has both positive and negative impacts on individual, and system. According to Friedman , globalization is inevitable incorporation of states, markets and technologies in a way that allows players of globalization to move faster and deeper freely, throughout the world. Globalization is understood differently by different individuals, the term globalization has taken over political and academic agenda for quite some time. Friedman (2012), point out that globalization can be traced back to 15th century where the first globalization occurred. The first wave of globalization occurred from 1492 to 1800. At this stage, the world shrunk from a large size to medium size. The author also points out that it was at this era where Columbus discovered America. The driving force for globalization at stage was resources and states. The second wave of globalization took place between 1800 and 2000. Friedman point out that globalization was as a result of companies globalizing for human resource and markets. At this stage, the world shrunk from medium size to small size. The third stage is globalization 3.0 whereby the world changed its size from medium to tiny. Globalization 3.0 was spearheaded by individuals according to Friedman (2012) 1. However, the three eras of globalization have led to serious controversies with critics pointing that some stages are still on. For example, Friedman explains that the first stage ended in 1800 but, to some people like Native Americans, it never ended. Critics also point out that globalization was all about fight for resources that resulted to displacement of people and scarcity of resources in some places2. The Impacts of Globalization on Individuals, States, and Systems Changes have been witnessed in many countries because of globalization. Most states have embraced globalization because they have benefited from it. Developed and developing countries are doing all they can to improve on their share in world markets. They are doing so by improving their exports and importing more commodities. Yusuf (2001) argues that the globalization has brought fear and hopes. However, clear analysis of the world economy for the past century indicates the merits of globalization. States and individuals have benefited from cross-border trades, technology and share of ideas3. Additionally, nations that have embraced globalization are more developed in comparison to the nation that previously restricted cross border trade. Impacts of globalization vary from state to state. Some states do not embrace globalization and this has to serious opposition of globalization. Results of globalization such as Asian crisis in 1998 are the cause of apprehension to globalization. Additionally, some people view increasing flow of capital and trade as a threat. For example, more advanced countries are in fear of displacement by workers in third world countries. The fact is that developing countries offers cheap labor in comparison to developed states. Currencies and banking sector are at high risk from volatility of capital flows. Yusuf (2001), points out that multinational corporation are taking advantage of their capacity to increase trade and production process without consideration of individual countries. States are also in fear of globalization because they no longer have authority to pass laws relating to resources allocation, industrial policy laws and other relevant laws. United nation agencies, Nongovernmental organization and international institutions have changed the view of states in drafting and passing laws regarding the management of their affairs. Globalization has increased trade between different economies. However, there are different views on whether individuals do benefit from trade resulting from globalization. The economic perspective of impacts of globalization is that the whole country gains from trade. There is however an assumption that a certain group suffers from trade. According to Behrens and Murata (2010), there is a view that the whole country gains from globalization, there and are also losers from trade as a result of globalization. However, the economic perspective shows that the losers are rewarded by those who gain from globalization4. Cases of job loss have increased in some develop countries like the U.S. developed countries have lost significant number of jobs to developing countries like China, India and Malaysia. The main cause is cheap labor opportunities in those countries as compared to home countries of the companies offering jobs. Companies have been outsourcing their jobs to other overseas companies. The impacts here are that jobs that the citizens could have done are given to other people outside the country. This has lead to increasing cases of unemployment in developed countries like the U.S., Canada and the UK. However, international trade as a result of globalization does not mean that all jobs are lost to other countries or offshore firms. Jobs can be lost through imports but, they can also be created productions of exports to outside countries. According to Groshen et al. (2005), net impact of trade on the United States’ employment is positive but, times it can be negative. The authors point out that jobs created through net imports in the U.S. are not more as compared to other sources of employment. It is approximately 2.4% of the total job opportunities in the U.S. This means that job opportunities through net imports whether positive or negative does not lead to serious cases of unemployment in the United States5. Impact of Globalization on Political, Economic and Security Systems Globalization has brought opportunities and challenges to every state in the world and more to developing countries. China is one of the developing countries that have witnessed series globalization for the past few decades. A change of policy in 1978 by Deng Xiaoping that led to the integration with the outside world is a sign of clear participation in globalization. The results of policy change are integration and openness to other countries right from previous political system of self reliance6. Globalization of china was as a result of capitalistic economic growth. Zheng (2004) shows that capitalism was adopted by the Chinese government after policy change in 1978. The outcome of Chinese adoption of capitalistic economic development is evidenced in social and economic changes of life in China. China signed a number of reforms after the first reform in late 1978. The author points out that the agricultural reform was one of the reforms by Chinese government that saw the development of agricultural production. Poor farmers in the village were the first beneficiaries of the reforms. Growth of agricultural products led to the development of other small businesses centers. This was due to surplus of agricultural products available to non-farmers. Other reforms include industrial reforms gave way for individuals companies to participate in international trade. According to the author, state-owned companies that promoted monopoly ended after industrial reforms effected in 1980s. Additionally, Chinese government developed coastal cities that attracted significant number of foreign investors7. Globalization of China and political change is currently witnessed from its economic growth. China is currently exporting large number of products to develop and developing countries. A study Autor et al. (2013) show that the U.S. exports from China has risen significantly since 1991 to date. Chinese provided close to 0.6% of its goods to the U.S. in 1991. However, exports to the U.S. by China rose significantly to 4.6% in 20078. China has not only had positive impacts of globalization, but it has faced challenges of globalization. According to Zheng (2004), the reforms that removed state-owned companies have lead to high number of unemployed individuals. This was after the layoffs by state owned companies9. Impacts of Globalization on Economy Economic globalization has both positive and negative impacts to global society. Trade resulting from globalization is the main aspect behind economic growth. Trade has expanded markets for local producers and has given them an opportunity to gain scale of economies. Additionally, it has also made them to be competitive, develop and improve on their technologies. Through trade, developing countries benefits through exports of some of their products to other countries. China is one of developing countries that has benefited immensely from trade with develop countries such as the U.S. and Europe. Due to high and increasing productivity in China, the U.S. sources some of the products such as furniture from China. According to Autor et al. (2013), The U.S. exports from China have grown significantly from $26 billion in 1991 to approximately $330 billion in 2007. However, exports by the U.S. to China have so far reduced. Increasing imports to developed countries from China shows that more jobs opportunities are created by Chinese firms. It also shows that Chinese economy is growing due to more exports outside the country. Country’s GDP has increased due to positive Chinese net imports10. Conversely, economic globalization has had negative impacts in some countries especially develop countries like the U.S. and EU. It is due to globalization that some jobs are outsourced to firms outside the country. Firms are off shoring due to availability of cheap labor in other countries such as India and China. Some analyst claim that impacts of off shoring is quite small. However, clear analysis shows that some jobs might be affected job off shoring. For example, jobs that require more skills if outsourced can lead to unemployment11. Income inequalities have also developed due to economic globalization. The rich individuals are becoming richer and the poor becoming poor. Income inequalities have been witnessed in states like China and other developing countries. For example, China’s current Gini coefficient is at 45. This is much higher as compared to Gini Coefficient in 1980 which was at 3012. Impacts of Globalization on Security System Globalization has different effects on states individuals and regions; similarly globalization has an unequal impact on security just as globalization has uneven impacts on economies. Political and social economic changes have improved human security at any level whether individual or group of people. Globalization has had positive and negative impacts on security Positive Due to globalization, super powers have abandoned indirect conflict that was common in mid 20th century. Globalization has been a connection between countries that were previous at war. Additionally, globalization has encouraged developed countries to devise ways of managing conflicts. For example, the U.S. and EU are working together to resolve conflicts in Middle East. Negative Globalization has improved ways of delivery of goods to any part of the world within a short time possible. However, this has open ways for drug lords to deliver drugs to all corners of the world. The result is insecurity in some of the neighboring places with individuals using or selling drugs13. References Autor, H. David, Dorn, David and Hanson. H. Gordon. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States.” American Economic Review 103, no. 6, (2013), 2121-2168. Behrens, Kristian and Murata, Yasusada.“Globalization and individual gains from trade” Journal of Monetary Economics 59, (2012), 703-720. Brooks, G. Stephen. Producing Security: Multinational Corporations, Globalization, and the Changing Calculus of Conflict. New Jersey: Princeton University Press, 2011. Friedman, L.Thomas. The Lexus and the Olive Tree: Understanding Globalization. New York: Picador, 2000. Gorg, Holger. Making Globalization a socially sustainable. World Trade Organization. Groshen, L. Erica, Hobijn, Bart and McConnell. M. Margaret. “U.S. Jobs Gained and Lost through Trade: A Net Measure” Federal Reserve Bank of New York 11, no. 8 (2005), 1-7. Milanovic, Branko. More or Less Income Inequality has Risen Over the Past Quarter-Century Instead of Falling as Expected finance and development, September 2011. Shiva, Vandana. The Polarized World of Globalization. A Response to Friedman’s Flat Earth Hypothesis. North America, 2005. Yusuf, Shahid. Globalization and the Challenge for Developing Countries. World Bank Decrg, June 2001. Zheng, Yongnian. Globalization and State Transformation in China. New York: Cambridge University Press, 2004. Read More