Economics & Extent of Globalization
Our everyday economics, ideas, and social interactions all are changed by and yet also mediate in some way, the process of globalization. Below mentioned are few examples to show the breadth of impact that globalization is having on the human species and to emphasize the extent and rapidity with which globalization is occurring. Below mentioned are few figures that exemplify the rapid acceleration of global interconnectivity: Mobility: Fifty million people were living outside their country of origin in 1989, but this number had grown to 125 million just a few years later (Roland, 1992).
International air passengers numbered 75 million in 1970 and 409 million in 1996 (John, 1999), a per capita increase of 255%. Total international tourist arrivals increased by over 50% between 1990 and 2000 (World Tourism Organization 2001), while the population increased by only 15%. By 2010, international tourism will involve at least one billion travelers each year, estimates the World Tourism Organization. Trade: Since 1950 the global economy has grown more than 500% (United Nations Development Programme 1999), while the world’s population has grown only by 132%. At the same time, international trade regulations have decreased:
35 countries were without exchange controls affecting imports in 1970, but this
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other news media is expanding; control over its ownership is becoming more concentrated. In 1983, about 50 media companies controlled more than half of all broadcast media, newspapers, magazines, video, radio, music, publishing, and film in the United States. But by 1993 this number had shrunk to 20. Today, fewer than 10 multinational media conglomerates control the majority of what Americans (and, to some extent, citizens of other countries) sees and hear (Warwick 2006). Telephone and Internet: Telephone and cellular subscribers have increased by 184% from 1991 to 2001, according to estimates by the International
Telecommunications Union and transborder telephone calls increased from 3. 2 billion in 1985 to 20. 2 billion in 1996 (John, 1999), a per capita increase of 430%. Internet users are predicted to double between 2002 and 2005, to total nearly one billion, while the population is estimated to increase by only 3. 5%. Political economy: Governments may be losing influence over their economies to non governmental organizations and business corporations. The number of registered international nongovernmental organizations increased by 20% between 1990 and 2000 to 37 thousand (Joseph et al 2006). Of the 100 largest
economies in the world, 51 are corporations; only 49 are countries (Christopher and Jan, 2005). In addition, the ratio between the wealthiest and poorest countries in terms of per capita income has grown from 11 to 1 in 1870, to 38 to 1 in 1960, to 52 to 1 in 1985 (Warwick, 2006). In 1988, the average income of the world’s wealthiest 5% of people was 78 times that of the world’s poorest 5%; five years later this ratio had grown to 123 to 1 (World Bank 1999). The gap continues to widen. Undoubtedly, we have seen increased intensity in anti globalization movements in response to the expansion of global production, trade,
and resource extraction. Counter globalization efforts come in various forms and include such diverse movements as the World Social Forum, anti-World Trade Organization demonstrations, BUY LOCAL campaigns, indigenous battles against oil exploration and gold mining, and the anti technology lifestyle of groups. Globalization is thus of great interest to many people – be it positive, negative, or otherwise. Impact of Globalization: The impact of globalization is the source of endless debate. In particular, debate revolves around competing interpretations of effects on investment, capital flows, jobs, profits and welfare.
One major assumption is that globalization reduces the capacity of states to promote welfare objectives within their own boundaries. A wildly held belief about the globalization of markets is that it has substantially decreased the autonomy of the nation-state, resulting in a ‘race to the bottom’ – a dismantling of welfare states – by governments competing for mobile economic resources. For many, globalization threatens the prosperity and stability that has characterized the advanced industrial countries since the Second World War, if not the legitimacy of the democratic
state itself. Visions of widespread social upheaval abound, and they are often accompanied by pleas for international political cooperation to regulate global capitalism. The bottom line of the conventional wisdom is that there is a fundamental mismatch between the global scope of markets and the national level at which politics are organized. Something has to give, and most commentators assume it will be the nation-state, de facto if not de jure. Globalization fosters an array of complex ethical dilemmas where clear assessments and informed choice become difficult. Yet choices are
being made, by default if not intention. It affects how people think and, ultimately, how cultures evolve. Greater exchange of information, symbols, and ideas among once distant cultures can foster changes in the ways that individual views their world and in the ways that people relate to one another as individuals or groups (e. g. , Kip 2000; John 1991). The ways that individuals view their world and the ways that people relate to one another are in turn mediated by language, the embodiment of a culture; and the linguistic makeup of our planet have changed significantly in the past few centuries.
At the turn of the 15th century, humans spoke an estimated 15 thousand languages. Over the last five hundred years, that number has dwindled to approximately 68 hundred, and of these, only a few are used in international communication. Some estimates projects that the number of languages spoken in the world would be cut in half by the end of this century (Joseph, 2006) and may be more threatened than species of birds or mammals (Christopher, 2005). Ironically, ethnic minorities frequently used globalized icons and symbols in new ways to express themselves and help promote the persistence of their culture (cf. Roland 1992).
Another preeminent characteristic of culture in the modern world is nationalism and being a citizen in a nation-state. Citizenship normally has entailed the construal of rights to an individual by the government of the geographically bounded area (i. e. , state) in which one lives, in addition to entailing the responsibilities demanded of the individual. But increased movement of people, information, capital, and goods has produced some new kinds of citizenship that may not be applicable to only one country or just to its borders (e. g. , John 1997). New forms of citizenship may have to do more with practicing
one’s culture within a different society, immigrating as a minority, being an ecological citizen, consuming international goods and services, and relating to or visiting other societies or cultures around the globe. The process of globalization takes no account of local culture and community, and is therefore unethical. It is often asserted that globalization is eroding national cultures. Before examining how globalizing process may be impacting upon national cultures, one need to consider the nature of such cultures, which includes being aware of the power relations at work in their formation. In this regard,
national cultures have traditionally reflected the influence of dominant groups or elites within a society, which until relatively recently has meant that women and minority groups have generally contributed little to their development. This in turn has meant that national cultures and nations have traditionally been sites of cultural contestation. Reflecting this fact, a further analytical difficulty that national cultures present is that they are not fixed and stable entities; rather, they evolve over time, which merely adds to the difficulty of determining any influence that globalization is having upon the,
There is now a substantial body of work insisting that global cultural flows are harmful to nation – states and national cultures. It is well evident that globalization increase opportunities for cross- cultural contact and for cross – cultural misunderstandings. The increased cross-border reaches of business, through whatever mode of market entry, requires an enhanced awareness of and sensitivity to differences in languages, values and behavioral norms. The alternative is less effective or even failed negotiations, marketing drives and investment plans. Cultural and ethical issues are separate but related
concerns. Business practices are the product of their own specific cultural environment. Although some practices are clearly unacceptable in all cultures, there are some grey areas where practices that are commonplace in some countries are regarded as unethical in others. Culture, more particularly the need to manage cultural diversity, is important in many stages of the internationalization of business and in all forms of market entry. The following example seeks to demonstrate culture’s general importance. Marketing Use of inappropriate advertising language or images, for example, can completely
undermine attempts to enter new markets. Entry into new markets also needs adaptation to specific consumer tastes. Even fast food outlets like Burger King, which attempts to deliver the same product throughout the world, must adapt their offering in some countries. For religious reasons, pork is not a suitable ingredient for hamburgers sold in Islamic Nations, for example, and in order to enter such a market, Burger King has had to localize its products. Thus, culture is a complex concept, open to a variety of definitions and difficult to pin down precisely. Culture could be
described as the combination of acquired experience and values that feed into and influence behavior and responses of distinct groups. By definition, culture is a learned phenomenon, the outcome of shared experience over many years that is passed down the generations. The influence of Western culture throughout the world seems to be accelerating, as the commercialized culture of the United States is marketed on a worldwide basis. From films to fast food, the United States dominates international mass culture, largely through the influence of capitalist markets, as conflicts theorists would argue.
Despite the enormous diversity of cultures worldwide, fashions, food, entertainment, and other cultural values are increasingly dominated by U. S. markets, thereby creating a more homogeneous global and capitalist culture. To sociologists, one of the intriguing questions about the globalization of culture is whether economic development supplants the traditional values of diverse world cultures. Sociologists have found that economic developments result in a shift from absolutist norms and values to more rational, tolerant, trusting, and participatory norms and values. However, global
economic change is not the sole influence on national cultures. The broad cultural heritage of diverse societies often reflected in religious and political orientation, such as Roman Catholic, Protestant, Confucian, Orthodox, or communist, also has an effect on the enduring value systems of societies. Educational and religious institutions, along with the mass media, transmit these values. A further albeit indirect pressure upon national cultures could be said to derive from the challenges that different aspects of globalization present to the nation – state and national sovereignty (John et al, 2007).
One such challenge is considered to come from the continuing evolutions of the institutions of global governance. In addition, to these external challenges to the nation – state, globalization may be changing the nature of the relationship between the state and its citizens. It could be well concluded that the globalization-as- threat-to-national-culture thesis is too simplistic a conception of what is taking place, based upon both an inadequate understanding of the nature of national culture and a flawed assumption that global cultural flows operate in a single or uniform manner. CONCLUSION:
Globalization is not simply an encroachment of markets into the sovereignty of states. States, markets and other factors are involved in a process which is shaping the nature and pace of globalization. While some forms of states sovereignty are eroded (such as in respect of formal monetary policy), new arenas of power and competition are opened up. These include regional organizations, international agencies and the competition among currencies. At the same time, globalization is changing not just what states, firms and people do; it is also changing how they see themselves and what they want.
It is not leading to global convergence: in the case of multinational enterprises, firms are making more nuanced and complex calculations about how to organize and where to produce. In the case of peoples, some groups and societies are integrating more closely into a Western-defined world; others are defining and promulgating alternative identities and values. Yet the gains and losses are unequally divided among strong and weak states. Internationally, globalization may well further empower those states which shaped globalization in the first place – reinforcing their capacity to regulate its ongoing impact.