Impact of Globalization & Revolutions Associated With It
What is Globalization?
What are the revolutions that led to globalization?
Who are the actors of globalization?
What developments resulted from globalization?
What are the pros & cons of globalization?
This article answers the questions stated above.
Globalization is a phenomenon which has produced unimaginable change in the world. From a time when humans rarely travelled far or had knowledge of other places, to today - where you go about with the knowledge of the whole world in your pocket.
Globalization is an international phenomenon of relatively rapid movement of goods, people, capital and service.
There is history to every phenomenon and the history of globalization consists of two revolutions that are:
1. Rapid Industrialization of 20th Century
The first revolution led to the steady and rapid transportation of goods and people, rapid movement of ships and trains. Rapid industrialization after WWW II also improved the safety of the transportation (ships, cars, airplanes etc.) and the world became connected. A person in South Asia could reach anywhere in the world in 24 hours. World became more connected than it ever was and the boundaries which previously held people from going too far steadily blurred away.
2. IT Revolution
The second revolution took place after 1990 and it sparked globalization to new heights. It connected world through network of computers in the cyber space. It is called as the fourth industrial revolution and has revolutionized economics, politics and international relations throughout the globe. Microsoft, Apple and other computer manufacturing companies invested huge amount of money in the development of cyber space, in which people interact with each other. Cyber space has minimized boundaries to the extent that we do not feel any boundaries when connected to people across the globe.
Technologically, the phenomenon of globalization has been triggered by these two revolutions. Aided by these two revolutions, the prime motivator of globalization was an ideology of free market economy, called capitalism. It was the free trade between states and that sates shall not levy any tariff or non-tariff barriers.
World Trade Organization
An international institution was founded in 1995, WTO. It consists of 189 member states. The basic ideology on which WTO was founded was to streamline global trade between states and to lower and diminish the tariff and non-tariff barriers to a standard minimum rate. Those who are the member of WTO, follow the rules in the charter which state that states shall liberalize the trade between other states and no state will intervene in free trade. e.g. sale of cell phones in your country that have been manufactured in another country.
WTO has put standardized rules on both tariff and non-tariff barriers. It tries to minimize both barriers. The rules have been made to facilitate world trade.
2008 World Recession:
2008 world recession, depicts a major pitfall of globalization. It started when in USA, real estate business collapsed i.e. there was a downfall of property prices and this led to the collapse of the stock market. The investors went downhill. Due to a connected economy this recession spread all over the world. Even Europe, UAE, China were effected.
Developments Due To Globalization:
Due to globalization there were two developments:
(1)Globalization of Politics: it has led to internationalism of events (global politics). Any incident that has happened locally can erupt internationally for example Syrian crisis or Trump’s daily whims and how they affect US’ policies.
(2)Globalization of Culture: changes in languages, eating patterns, religion, dressing due to influence of global culture. We are taking effect from other cultures; they are taking effect from our culture and thus a sort of diffusion is taking place.
Actors of Globalization
(1) Semi-Government Actors:
They include international financial organizations such as WTO, IMF, World Bank, Asian Bank, European Bank. These institutions finance and facilitate global trade.
(2) Multi-National Corporations:
Multinational corporations or worldwide enterprises are corporate organizations that control or own the production of services and goods in more than one country, other than their home country. They can also be called as a stateless corporation, a transnational corporation, or a international corporation. These include food brands, infrastructure companies etc.
Due to globalized economy the sovereignty of state is receding and the lines between territories are being blurred.
Pros of Globalization
- There is free trade. Thus things are being sold at actual value i.e. actual prices.
- Economy has a contagious effect i.e. development in one part of the globe can boost and facilitate another part of the world.
Cons of Globalization
- Any economic recession in other direction can affect populations not in direct contact. e.g. US recession of 2008 leading to world recession.
- After globalization world has been divided into GLOBAL SOUTH (under-developed countries) and GLOBAL NORTH (developed countries). Global south is investing in global infrastructure and global north is putting property rights on those inventions. So the current status is that rich are becoming richer and poor are becoming poorer. The global south is thus demanding from MNCs the globalization of scientific knowledge and infrastructure. The MNCs of the global south move to developed countries and create further disparity among the two sides. True fruits can be bored by anyone if both stake holders, the global south and the global north, come in terms with each other.
© 2019 Heere Zed