Globalization, as a phenomenon of connectedness and integration across the global economy, society, and politics, harbors both promises and perils. it encourages cross-border goods and services that may fuel growth but also worsen income disparities and social injustices because it benefits ‘haves’ more than ‘have-nots.’ This essay probes through the multifarious determinants of globalization from capital mobility and deregulation through job creation to technological empowerment-and tries to extract the elusive interface between its opportunities and obstacles.
Globalization is a form of interdependency and integration among the worldwide economy, society, and political system; it consists of the cross-border flow of goods, services, capital, information, and ideas due to advances in technology, transportation, and communication. To an economist, globalization features one country’s growth and dependency of markets and businesses on another with respect to one another. Socially, it involves cultural sharing, human migration, ideas, and values that go widespread(Deeg and O’Sullivan 754). It does so at the political, governance structuring, international relations, and redistribution of power levels between the states and non-state actors
A feature of globalization, capital mobility facilitates the unrestricted flow of capital across borders, allowing the rich and multinational corporations to seek profits by investing in lucrative opportunities everywhere. Investors take advantage of such mobility to exploit jurisdictions with weaker regulations or less labor protection so that they can make profits while ignoring moral pursuits(Alan and Robert, pp415). For example, foreign direct investment (FDI) typically flows into countries or regions with low labor costs and relaxed regulations, which means strengthening the exploitation of poor workforces in emerging economies by multinationals. Indeed, such practices add to the tendency of globalization to leave unchecked the growth of income inequality and social injustices in the world.
Deregulation is one of the symptoms associated with globalization. However, only the rich reap the fruits of these changes as only they possess the power to take advantage of such changes. Large business organizations and financial firms achieve huge returns when legislation is relaxed; hence, more profit is encouraged. Wealth accumulation among owners and managers is also promoted. For instance, the 1980s and the 1990s in the West saw an increased deregulation of finance, a move that encouraged speculative financial practices. It only further deepened income inequality through an imbalance that overwhelmingly favored those holding massive financial assets as compared to wage earners(Deeg and O’Sullivan 754). As such, it is seen that deregulation, in a backdrop of globalization, has been intensified and driven by disparity benefits that favor the affluent while defining greater social stratification.
It has, on the one hand, concentrated wealth and expanded global income inequality. Rich individuals and large corporations have been advantaged in many ways by integrating into the global market, allowing them to enjoy a dazzling share of economic gains. It becomes explicitly obvious when it is considered that over 1% of the world’s population owns more assets than the bottom 99% combined do. It speaks volumes as to the extent of serious disparities being created by globalization. This trend only emphasizes the growing chasm between the elite and the rest, accentuating the actual challenges of socio-economic inequality being intensified by global economic integration.
However, globalization itself implies an automatic result in higher levels of international trade as well as foreign direct investment (FDI) into developing countries, which in turn will boost economic development and the rise of new industries or sectors. The best example of this is epitomized in the radical industrialization and economic development experience of the East Asian ‘tigers’: South Korea and Taiwan. It is quite unprecedented to see that the developed nations witnessed massive growth from the impacts that globalization had on them, with their businesses expanding and thriving as a result of capital inflow and exposure to potential opportunities that international trade opened up for them(Jeffry and Lisa 26). This further underscores the potential that globalization has for catalyzing economic development in developing countries by way of job creation and overall stimulation of growth.
The higher the level of international trade, the more employment opportunities can be created. An increase in such industries also brings better conditions of work with a substantial wage rise. For example, the growing garment industry in countries like Bangladesh and Vietnam has raised the opportunity for employment for a huge mass of their respective populations. This growth provides solutions not only to unemployment questions but also an indication that people enjoy better living standards and socioeconomic development(Donald, pp139). These are the kinds of cases that underline the potential transformation effects of globalization in elevating the livelihood of people in the developing world and how expanded trade can indeed lead to positive job creation and wage expansion.
Additionally, Globalization allows technology to flow across borders. It empowers global citizens in developing countries to gain access to technological tools and resources that enable them to innovate and become productive. An example of such penetration is the percolation of mobile technology in different corners of developing nations. It has changed the way in which communication is taking place by enabling these people with more opportunities for networking and accessing information on mobile phones(Major pp812). In addition, mobile telephony has proved to be a very useful source for providing key services, including health facilities and financial transactions, helping people living in underserved areas not only to improve their lives but also to provide opportunities for economic upliftment.
The effects of globalization are multifaceted and must thus be put into consideration in relation to the various heterogeneities that they impress on different segments of society. Obviously, worsening income inequality is one of the chief complaints against globalization since its benefits are inclined toward the richer people, and so are its beneficiaries(Alan and Robert, pp415). This pattern is more associated with job displacement into sectors that are basically easily outsourceable and automatable, both of which are the root causes of rising economic insecurity and social unrest. Among other factors identified as emanating further environmental degradation through increased pollution, depletion of natural resources, and additional climate change is globalization. However, in all these setbacks lie great prospects for serious intervention and policy changes. It is the governments that should, therefore, closely coordinate with international bodies and civil societies in coming up with and implementing a strong set of policies that will cushion negative impacts caused by globalization, as it works in line with development that is inclusive and sustainable(Major pp812). It means dealing with income disparities by way of progressive tax systems and social welfare interventions, developing environment-friendly manufacturing practices, and promoting job creation and retraining schemes to be able to tackle job losses. The combined efforts and collaborative endeavors with nations could harness the potential that globalization entails for furthering the common good of humankind and addressing the root challenges.
In conclusion, globalization has developed into a paradox concerning economic opportunity and inequality. One may further claim that what is enormously experienced thus far, in terms of marked economic growth and progress, is evidently not matched by the increase of the gap between the rich and the poor, putting social cohesion and environmental sustainability at stake. In essence, the challenges of globalization can only be balanced through active effort, not just at the national level but between organizations, governments, and civil society, to propose policies toward inclusive development. It will be done by realizing the gains made so far in globalization and cushioning its downsides in an objective pursuit of a more just and sustainable future for all.
Work Cited
Aaron Major: The fall and rise of financial capital, Review of International Political Economy, 15:5, 2008, pp. 800-825
Alan. V Deardoff and Robert M Stern. “What you should know about globalization and the world trade organization” Review of international economics, 10(3), 2002, pp. 404-423 file:///C:/Users/Administrator/Downloads/Deardorff%20What%20You%20Should%20Know%20About%20Globalization.pdf
Deeg, Richard, and Mary A. O’Sullivan. “The Political Economy of Global Finance Capital.” World Politics, vol. 61, no. 4, 2009, pp. 731–763, http://journals.cambridge.org/abstract_S0043887109990116
Donald G. Richards. ”What Do Progressives Need to Know About Trade? Some observations on the competitiveness debate” International Review of Applied Economics, 13:1, 1999, 125–141, http://dx.doi.org/10.1080/026921799101779
http://dx.doi.org/10.1080/09692290802409202
Jeffry Frieden and Lisa L. Martin. “International Political Economy: The state of the sub-discipline Department of Government Harvard University Cambridge, MA 02138, 2001, pp 10-40 file:///C:/Users/Administrator/Downloads/Frieden%20and%20Martin%20State%20of%20Subdscipline.pdf
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