Economics globalization essay

Economic globalization, however, requires the predominant presence of capitalist economy. Inasmuch as there were a large number of socialist governments in the sixties and seventies, the pace of capitalism was hampered. The coming of age of economic globalization was significantly facilitated by the radical onset of new technologies over the past few decades.

Ever since, globalization simply has been going hand-in-hand with the spreading of information revolution. The spread of the Internet throughout the world is making it a prime agent of economic globalization, as well as globalization in cultural and other senses too. With the combined impact of explosion of computer technologies, the dismantling of trade barriers and the expanding political and economic power of multinational corporations, economic globalization took roots and has been rapidly gaining increasingly conspicuous presence in the past several years.

Today, its pace seems unstoppable. Share this Post! All rights reserved. Kylie Garcia. Hi, would you like to get professional writing help? Governments shifted their economies from central planning to markets. These internal reforms allowed enterprises to adapt more quickly and exploit opportunities created by technology shifts.

Globalisation / Globalization

Multinational corporations reorganized production to take advantage of these opportunities. Labor-intensive production migrated to areas with lower labor costs, later followed by other functions as skill levels increased. Networks raised the level of wealth consumption and geographical mobility. This highly dynamic worldwide system and powerful ramifications. On 27 October , the London Stock Exchange enacted newly deregulated rules that enabled global interconnection of markets , with an expectation of huge increases in market activity. This event came to be known as the Big Bang.


An intergovernmental organization or international governmental organization IGO refers to an entity created by treaty, involving two or more nations, to work in good faith, on issues of common interest. International non-governmental organizations include charities, non-profit advocacy groups, business associations, and cultural associations. International charitable activities increased after World War II and on the whole NGOs provide more economic aid to developing countries than developed country governments. Businesses participate in globalization in a number of different ways.

Many businesses now have international supply chains , favoring manufacturing in low-cost countries. Some engage in international outsourcing to low-wage countries, which involves the contracting out of a business process e. Multinational corporations have business operations in multiple countries, either simply because they want to sell goods and services into the local market, or because a given country has advantages like natural resources, low wages, low taxes, or a useful talent pool. International migrants transfer significant amounts of money through remittances to lower-income relatives.

Communities of migrants in the destination country often provide new arrivals with information and ideas about how to earn money. In some cases this has resulted in disproportionately high representation of some ethnic groups in certain industries, especially if economy success encourages more people to move from the source country. Movement of people also spreads technology and aspects of business culture, and moves accumulated financial assets.

According to prominent Chinese economist Gao Shangquan , economic globalization is an irreversible trend due to the fact that world markets are in great need of science and information technologies. With the growing demands of science and technology, Gao states that with world markets take on an "increasing cross-border division of labor". However, Princeton University professor Robert Gilpin argues that nations' economic policies have mistakenly slowed their own growth by resisting globalization, showing that globalization is not irreversible.

Silk roads (1st century BC-5th century AD, and 13th-14th centuries AD)

Rappa agrees that economic globalization is reversible and cites International Studies professor Peter J. Economic growth accelerated and poverty declined globally following the acceleration of globalization. Per capita GDP growth in the post globalizers accelerated from 1. This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4. Also, the non-globalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.

This rapid growth among the globalizers is not simply due to the strong performances of China and India in the s and s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial. According to the International Monetary Fund , growth benefits of economic globalization are widely shared. While several globalizers have seen an increase in inequality, most notably China , this increase in inequality is a result of domestic liberalization, restrictions on internal migration, and agricultural policies, rather than a result of international trade.

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Poverty has been reduced as evidenced by a 5. Even in China , where inequality continues to be a problem, the poorest fifth of the population saw a 3. In several countries, those living below the dollar-per-day poverty threshold declined.

In China , the rate declined from 20 to 15 percent and in Bangladesh the rate dropped from 43 to 36 percent. Globalizers are narrowing the per capita income gap between the rich and the globalizing nations. China , India , and Bangladesh , some of the newly industrialised nations in the world, have greatly narrowed inequality due to their economic expansion. The global supply chain consists of complex interconnected networks that allow companies to produce handle and distribute various goods and services to the public worldwide.

Corporations manage their supply chain to take advantage of cheaper costs of production. A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources , raw materials , and components into a finished product that is delivered to the end customer. Globalization is sometimes perceived as a cause of a phenomenon called the " race to the bottom " that implies that to minimize cost and increase delivery speed, businesses tend to locate operations in countries with the least stringent environmental and labor regulations.

Pressure to do this is increased if competitors lower costs by the same means. This both directly results poor working conditions, low wages, job insecurity, and pollution, but also encourages governments to under-regulate in order to attract jobs and economic investment.

In developing countries with loose labor regulations, there are adverse health consequences from working long hours and individuals that burden themselves from working within vasts global supply chains. Seth, Divya, and Nimali Singh published research evidence linking a wide range of health risks and overworking. Strazdins concluded that negative work-family spillover especially is associated with health problems among both women and men, and negative family-work spillover is related to a poorer health status among women.

Economic Globalization

It is common for the work lifestyle to bring forth adverse health conditions or even death due to weak safety measure policies. After the tragic collapse of the Rana Plaza factory in Bangladesh where over deaths occurred the country has since then made efforts in boosting up their safety policies to better accommodate workers. In developing countries like with loose labor regulations and a large supply of low-skill, low-cost workers, there are risks for mistreatment of some workers, especially women and children.

The reason it costs corporations more is because people can not work to their full potential in poor conditions, affecting the global marketplace. This kind of sudden reduction or elimination in hours is seen in industries such as the textile industry and agriculture industry, both which employ a higher number of women than men. Several movements, such as the fair trade movement and the anti-sweatshop movement , claim to promote a more socially just global economy.

The fair trade movement works towards improving trade, development and production for disadvantaged producers. The fair trade movement has reached 1. Fair trade works under the motto of "trade, not aid", to improve the quality of life for farmers and merchants by participating in direct sales, providing better prices and supporting the community.

Some global brands were found to do that before but they took some methods to support the labors soon after. The movement is taken to decrease the wrongdoing and gain the profits for labors. Various transnational organizations advocate for improved labor standards in developing countries. This including labor unions , who are put at a negotiating disadvantage when an employer can relocate or outsource operations to a different country. Capital flight occurs when assets or money rapidly flow out of a country because of that country's recent increase in unfavorable financial conditions such as taxes , tariffs , labor costs , government debt or capital controls.

This is usually accompanied by a sharp drop in the exchange rate of the affected country or a forced devaluation for countries living under fixed exchange rates. Currency declines improve the terms of trade , but reduce the monetary value of financial and other assets in the country. This leads to decreases in the purchasing power of the country's assets. A article in The Times reported that hundreds of wealthy financiers and entrepreneurs had recently fled the United Kingdom in response to recent tax increases, relocating to low tax destinations such as Jersey , Guernsey , the Isle of Man and the British Virgin Islands.

Capital flight can cause liquidity crises in directly affected countries and can cause related difficulties in other countries involved in international commerce such as shipping and finance. Asset holders may be forced into distress sales. Borrowers typically face higher loan costs and collateral requirements, compared to periods of ample liquidity, and unsecured debt is nearly impossible to obtain. Typically, during a liquidity crisis, the interbank lending market stalls.

While within-country income inequality has increased throughout the globalization period, globally inequality has lessened as developing countries have experienced much more rapid growth. Economic inequality includes equity , equality of outcome and subsequent equality of opportunity.

Globalization explained (explainity® explainer video)

Although earlier studies considered economic inequality as necessary and beneficial, [37] some economists see it as an important social problem. International inequality is inequality between countries. Someone once said that ignorance was bliss, which is sometimes true because sometimes is better to not know. However, in this case, we have been ignorant too long.

It is better to know and we need to wake up. Imagine you are driving your car down a highway, and you accidentally nod off. You now have no control of your car. It may stay straight and continue to go down the road, and it may not. Free Essays words 2. In general, economic expansion seeks the lowest costs of raw materials and cheapest labor cost, but it frequently overlooks the broader impact that dynamics of globalizing have on socioeconomic status of developing societies.

The countries that adopt policies to facilitate globalization have to consider that integration into a global society is not always painless or smooth Advanced technology dissolves the international boundaries while opening cultures to an entire new arena where globalization can occur.

Globalization empowers entities as it connects the world, supports economic developments, and enables information availability. Cultural diversity and globalization forms two different perspectives: globalization can enable mobilization and empowerment of people through self-representation, provide employment opportunities, and support collective identity by socialization; globalization has Furthermore, globalization increases political relations among a wide variety of people and nations.

Globalization, according to L. In Globalization 2. And then around came Globalization 3. Globalization is a notion of the growing interconnectedness of the world categorized into three forms, cultural, political and economical globalization For centuries many people and companies had invested in other countries even before the First World War. Globalization is a huge issue, because it affect on all the people around the world This is because of its deep controversial nature. Many scholars argue that advocates of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while antagonists of it contend that the creation of an unregulated international free market has profited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people Powerful Essays words 5.