People, corporations, and governments from many nations are increasingly coming into contact with one another as a result of this process of interaction and integration. It's the increasing interconnection of nations throughout the world. It has an effect on the environment, culture, economy, political institutions, and the general well-being of mankind since it is fueled by technology, commerce, and investment from across the world.
People and communities throughout the world have been impacted by globalisation, which has become a contentious subject in the public arena. Since the Bronze Age trade between Sumer and Indus Valley Civilization, some historians have argued that there has been at least some type of globalisation since that time period. Globalization began in the 15th century when Portugal and Castile dispatched the first journeys to the Cape of Good Hope and the Americas.
As a result, three distinct eras of globalisation may be identified:
There are many good implications attached to the term "globalisation," including a rise in knowledge, trade, and capital exchange that is fueled by technical breakthroughs such as shipping containers and the internet. As a result of globalisation, the globe is said to be better off both culturally and economically. As far as the United Nations is concerned, this technique may be able to eradicate poverty by the year 2100.
Cons of Globalization:
However, not everyone believes that globalisation has been beneficial. Critics, particularly those who oppose the free market economy, have slammed it. The likes of Joseph Stiglitz and Ha-Joong Chan have asserted that globalisation does not relieve poverty, but rather maintains it.. New technology and foreign investment in emerging nations may have contributed to rising inequality, according to the International Monetary Fund (IMF). Globalization has benefited a tiny number of nations, according to the IMF. Even in industrialised countries, the impacts have been documented. Specifically, this is about corporations who have relocated manufacturing to lower-cost nations, a trend that has had a severe impact on employment in industrialised countries. The question that arises is whether the benefits outweigh these disadvantages.
Three primary elements have been shown to be responsible for this development:
During the process of globalisation, technology plays a unique role. People, products, and ideas may now more easily transcend borders thanks to technological advancements. Using transportation technology, for example, large quantities of goods and people may be transported quickly. While technology made it possible for individuals to exchange information instantly, automation increased the production and flow of products and services. In order for commerce to have an impact, it must be able to increase the level of interdependence between nations.
Being entirely self-sufficient is nearly impossible in today's environment. Trade barriers were removed and prohibitions on foreign investment were reduced, and the global marketplace was born. International investment, on the other hand, acted as a catalyst for globalisation through deepening economic ties. Countries across the world have benefited from international investments in many forms, such as commercial loans and foreign portfolio investments, such as foreign direct investments (FDI). New businesses, employment, and sources of revenue have been established as a result.
Pros of Globalization:
There are four key benefits that globalisation has provided us, and many people tend to take them for granted.
The following are the primary advantages of globalisation:
One of the most visible effects of globalisation in the present degree of market competitiveness. Increasing competition on worldwide scale results in better quality products and services. Customers' needs tend to rise as they have more alternatives to select from, and businesses must adjust to meet these new expectations. Increased requirements are necessary for domestic businesses to compete with overseas rivals in today's market. Market efficiency and safety have improved as a result of globalisation, which has also heightened competitiveness. It is imperative that all markets strive toward efficiency. An equilibrium exists between what consumers are willing to pay for a product or service and what sellers will offer it for.
This is what economists call an "efficient market." It is possible for enterprises to cut the cost of their products and services by outsourcing their manufacturing processes or purchasing from a supplier who provides a discount. There are other options, such as raising compensation for employees or investing in growth, if some firms decide not to decrease prices. Because of the interdependence of countries in today's globalised globe, wars between them seem improbable. By stabilising security via economic interconnectedness, globalisation has achieved its goal. Human rights have also been improved as a result of this process. When these rights are violated, there is greater media attention and attention from all around the world.
Consequences for emerging nations
Unanimity among economists on the impact of globalisation on inequality may be lacking, but there are no examples of developing countries growing for an extended period of time without liberalising their economies.... Poverty in developing countries cannot be blamed on globalisation alone. It's more to do with failed reforms and inefficient governance and economic strategies. There is absolutely no evidence that trade causes poverty or slows economic progress.... Conversely, countries that allow freer commerce tend to expand faster and have higher living standards. Growth in wealthy countries has a ripple effect on developing nations. However, determining just how the developing countries have profited is not often that straightforward. This is due to the fact that globalisation has such a wide-ranging effect on several levels, such as technology and macroeconomics. Furthermore, no information is available on the overall well-being of the people living in these nations.
Affects on the developed world
Among the social consequences of globalisation include environmental harm, employment uncertainty, and pricing volatility. There is an increase in the use of natural resources as a result of globalisation. Because more people are trading goods, there is an accompanying rise in transportation and the consumption of fossil fuels. Humanity is in grave danger because of all of this pollution and climate change. Prices have risen and fallen as a result of greater market competition. It has become increasingly difficult for developed countries to compete with countries like China, which can create similar items at a far lower cost. Jobs in the global economy have become increasingly unstable and transient as a result of globalisation. In industrialised nations, corporations may outsource portions of their operations, mainly manufacturing, but even functions like customer support are increasingly being outsourced as a consequence. Thousands of individuals have lost their employment as a result, mostly in developed countries. As a result of globalisation, cultures have also been affected. Some argue that it has resulted in a breakdown of cultural borders. There has been a thawing of cultural barriers in developing countries as a result of increased cultural interaction between western and local cultures. The negative effect is that the uniqueness of these local cultures diminishes.
There can be little doubt that globalisation is a complicated process that has large-scale consequences on both emerging and developed nations, as this research shows. Open markets, on the other hand, bring with them efficiency and possibilities. Selling things in other nations is as simple as selling them in your own country. Money is able to move more freely across borders, which leads to a rise in overall demand and, ultimately, a rise in overall income. As markets grow more interconnected and competitive, there are new risks and uncertainties that must be taken into account. As a result, prices and earnings are more volatile, putting enterprises under continual threat from new rivals that have little or no pricing power. Globalization cannot be stopped, despite the fact that some of its consequences are grave. As a global community, we all rely on each other for our survival.
Author: Gina Rinehart
Profile: Economics Assignment Help At LiveWebTutors
Designation : Economics Writers & Professor @Oxford