My Understanding of Globalization
The term globalization had appeared about thirty years ago and had a major impact on the world. Globalization is a process of international integration on financial, political, cultural levels. According to International Monetary Fund (2002), four things are the basis of globalization: financial flows, trade, people and knowledge (technology). Schaeffer (2003) points out five things that are globalized: investment, trade, production, technology, democracy. It is clearly seen that different people include different things into the term globalization. In his study What Is Globalization? The Definitional Issue Again, Jan Arte Scholte summarized all knowledge about globalization into a single study. Definitions of globalization as a process can be addressed from different points of view. The one I think is the most complete and fully explains this process was provided by Al-Rodhan and Stoudmann: Globalization is a process that encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities (Al-Rodhan & Stoudmann 2006, p.5). To me, globalization is a two-way street it has its positive as well as negative sides.
Scholte (2002) states that the term globalization can be interpreted in five different ways: as internationalization, liberalization, universalization, westernization, and deterritorialization. All this definitions are broad and related to each other, but things that are the key components in each of them is completely different. Each way has its advantages and disadvantages, but I am going to critically evaluate three of them: internationalization, universalization, and liberalization.
When globalization is interpreted as internationalization, it is simply an international relationship and exchange between countries. On the one hand, this definition includes everything: knowledge, trade, finances, labour, etc. On the other hand, this interpretation is too blurry; it lacks specification of what is meant by international relationship.
In case of universalization, globalization is taken to describe a process of dispersing various objects and experiences to people at all inhabited parts of the world (Scholte 2002, p.11). This definition is about distributing various goods and services, and it is some kind of globalization, but globalization, in the first place, is integration and interchanging, not distribution. Also, nothing was said about finances and trades in terms of universalization, which is a major flaw.
Lastly, it is worth considering the interpretation of globalization as liberalization. In this case, Scholte (2002, p.10) describes globalization as a process of removing government-imposed restrictions on movements between countries in order to create an "open", "borderless" world economy. This concept is a total flaw, because free trade exists to describe countrys economy without any restrictions on import or export; therefore, there is no need to call this concept globalization. Scholte has conducted a great research, but none of his concepts is close to sufficiently defining globalization.
Globalization has many advantages. Firstly, it globalizes the allocation of resources. Entrepreneurs are able to use cheap work force, which results into lower prices for the consumer. Global markets also help to solve unemployment problem. Using labour from all over the world may result in a better quality of work, thus better quality of products. Secondly, it is global cooperation. If some country has a problem (economic, cultural, etc.), in the globalized world, it can ask for help, and the problem will be addressed with the power of many countries. This will make solving of the problem faster and bring back the balance to global economy. Furthermore, globalization may help poor countries to catch up with more developed and rich ones. It can be done by interchanging labour and technologies, distributing products, giving money, etc. International Monetary Fund (2002) thinks that larger economies may help poor countries by promoting trade. One proposal on the table is to provide unrestricted market access for all exports from the poorest countries. This should help them move beyond specialization on primary commodities to producing processed goods for export and by encouraging flows of private capital to the lower-income countries, particularly foreign direct investment, with its twin benefits of steady financial flows and technology transfer. Moreover, globalization raises international tourism to a new level. Transportation of goods will also be easier if countries cooperate. Finally, in addition to cross-country cooperation, globalization will help solve such international problems as terrorism, environmental problems, etc.
Globalization has its disadvantages too. It uses limited resources too quickly. If poor countries have limited resources, they will disappear faster because of the countrys cooperation. If political globalization happens, this is also a bad sign, because powerful countries, like USA, may dictate less powerful countries how to run them. It may be a big problem, because each country has its customs ad culture and should have sovereignty. Moreover, globalization brings more competition into the markets, as the quantity of labour increases, which may lead to unpredictable consequences. BP Statistical Review of World Energy June 2013 (2013) also showed that in the last thirty years, coal consumption has increased, which may be also a consequence of globalization. As a result of the increased coal consumption, carbon dioxide emissions into the atmosphere raise, which is one of the biggest environmental problems. Lastly, the major flaw is that globalization bundles countries so that a domino effect occurs: if one country falls, others are likely fall with it.
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Globalization is not a completely positive process; it has its negative sides too no matter how you slice it. World constantly develops, and globalization is a part of this scheme. This process needs to be controlled, because it is destructive if left unmanaged. However, if countries cooperate, they may supress the power of disadvantages for good. Time will show what impact globalization will have on countries and the world as a whole.