Over six main aspects; firstly there is

Over the past
decades, the world has been transitioning into a global marketplace. Today
financial markets, industry, and politics are all internationalized. This
internationalization has led to an increased transfer of capital across
borders, increased communication throughout the world, an increased importance
of trade in the economy, and an increase in international trade policies.
Globalization has had drastic effects on the economic world and has created
many challenges politically. This essay defines globalization, gives a brief
history, and gives several different perspectives on globalization.
Recommendations for the future will be given, such as what regulations should
be put into place, how the politics should be handled, and how to prevent
globalization from going too far too quickly.

 

Globalisation
is cut into six main aspects; firstly there is international trade and the
creation of the global marketplace. Globalization can be viewed as an enhance
to the amount of international trade.

 

Globalisation refers to the integration of
markets in the global economy, leading to the increased interconnectedness of national economies. 
Markets where globalisation is particularly common include financial markets, such as capital
markets, money and credit markets, and
insurance markets, commodity markets, including markets
for oil, coffee, tin, and gold, and product markets, such as markets for motor
vehicles and consumer electronics. The globalisation of sport and entertainment is also a feature of
the late 20th and early 21st centuries.

 

Globalization has
expanded beyond its economic roots and has proliferated into human rights, the
environment and even national security. Although these new initiatives do not
look similar to the ones we are used to seeing the difference is that today’s
agreements come equipped with their own governance structures. This has led to
an astonishing shift of policy-making prerogatives from individual
nation-states to a host of new, higher level political institutions. This is a
cause for celebration the notion that political institutions have come together
to grow in size, importance and boldness is today’s conventional wisdom.

 

There are three main competing views on globalization, each
discussing different positives and negatives impacts that are associated with
globalization. The three different perspectives are the neo-classical perspective,
the Marxist/Socialist perspective, and the Structuralist view.

 

Neoclassical/neoliberal
views

The first competing view is the Neoclassical/neoliberal
perspective, this view argues that overall history and current economics have
joined together to form a new relationship where nations are uniting both economically
and politically. It’s very essential for countries to come collectively in both
of these aspects in order to be a success in the globalized world.

The neoclassical/neoliberal perspective views that the world
economy is controlled more by the current marketplace than by governments. It
is believed that industry, trading, and the global financial marketplace drives
the economy, with governance having little to no control over the marketplace.  If trade was so essential to expanding
markets, thus allowing increased productivity and greater specialization, it
would be easy to show how international trade would be so beneficial (Adam
Smith). Firstly, it provides a source of external funding that boosts the
amount of money available to fuel trade internally. Additionally, it enables
further expansion of markets on an international scale. An example of this
could be two countries selling two pairs of goods, if one country has an
‘absolute advantage’ in producing one set of goods and the other country has an
absolute advantage of producing their set of goods, they would each be
specialized for their own country for selling the goods they have. The
advantage of having this is that both countries will benefit from the
specialization provided that the gains from trade are fair. Furthermore, trade
and the economic success enables many types of countries to both expand and the
process profit from a huge economic expansion into markets overseas to be able
to acquire cheaper resources. However, this could be a potential problem as countries
that are significantly better at producing and countries which are more
advanced would benefit from this whereas countries with less productivity and
being less advanced wouldn’t, simply because of lack of growth and development
and thus making it harder to trade. David Ricardo, refined smith’s theory by
arguing that from two countries if one country was better than the other at
producing both commodities, then that country will be specialized for that particular
produce. For example, Ricardo uses trade between two countries
being England and Portugal in produces of cloth and wine to explain how it assists
Portugal to import cloth even if Portugal can produce cloth with less labour
than England. Current economists portray that England has a comparative
advantage in producing cloth. Ricardo states, “To produce wine in
Portugal, it might require only 80 men for one year, and to produce the cloth
in the same country, it might require 90 men for the same time. Thus it would be
advantageous for them to export wine in exchange for cloth. ”

Due to globalisation rising alongside the increase in
accessible/useable technology and convenience of improved transportation,
technology has made it easier for people to communicate across borders, and has
also lead to a decline in the cost of transportation. The technological revolutions
have lead to very lower expenses of transportation. It is now cheaper and more
efficient to transport goods from country to country. Globalized transportation
has increased profitability and thus during the main growth stages of
globalization between 1970 and 1993 the increase in transport was up by nearly
fifty percent throughout Europe. On average, a person went from travelling 16.5
km per day to 31.5 km per day. Since the 1970s the flow of goods in Europe has noticeably
increased. The transport of goods by road has increased by 40%,
intercontinental rail shipping has increased by 17%, and waterway shipping has
increased by 12% (Capineri and Leinback, 2004).

 

A major change with transportation costs has enabled business’
to acquire greater profits by relocating factories, concentrating production in
one sector, or in one location, whereby country inequalities exist (Heshmati,
2003). In addition, Companies can now transfer files via the internet, and this
enables the possibility to have meetings without every member being physically
present. This has led to lower long distance communication costs and the
exchange of information is drastically easier than ever before (Mukherjee,
2008). International businesses can now telecommunicate with others through the
use of email, telephone conferences, and videoconferences. The increase in
telecommunications development had to do with a cause-effect relationship
between technological development and the deregulation of financial market
policies. (Czaputowicz, 2007).

 

 

 

 

Socialist/Marxist
views

 

The second competing view is the Socialist/Marxist
perspective. They argue that globalization has led to an increase in the
inequalities of countries/nations. Marx has many contradicting viewpoints on
exactly how unequal nations are currently, and how big a factor globalization
is playing in the inequalities. Firstly, Marx was in agreement with smith that
capitalism led to unprecedented growth but he also made the point that there
was a huge flaw. He believed the social system of capitalism is very unfair, he
believed that owners of capital are able to exploit their advantage of certain
access to recourses and some political powers are in the hands of a few people.
The more wealthy nations are continuing to increase their status of wealth
whilst the poorest nations/countries are continuing to remain poor. It has been
established that 20% of the world’s richest population control 86% of world
gross domestic product, as well as 82% of world exports. In comparison to the
world’s poorest 20% population consume 1.3% .

 

Low-income
countries will not be left out of globalisation due to the increased reduction
of trade borders throughout the world. Rising countries such as India and China
have reduced poverty and have shown an increase in economic growth since they took
on open economic policies in the 1990’s (Cheng and Mittlehammer, 2008). It is vital
to put these policies in place so that more countries will want to partake in
globalisation. In some parts of the world there
are no guarantees that the wealth from inward investment will assist the local
community of the less developed countries. Often, profits are sent back to the
MEDC where the TNCs are based. If it becomes cheaper to operate in another
country, the TNC might close down the factory and make local people redundant. However,
If developing countries
know that they will not have to suffer from inequalities they will want to join
globalization. A study found that foreign investment has had a positive impact
on economic growth when country-specific factors are taken into account
(Carkovic and Levine, 2002). These factors include; domestic financial
development, school attainment, and national income.

 

Structualist writers

The final competing view is the Structuralist writer’s
perspective. This specific perspective differs from the other two perspectives
in various ways. Firstly, it is believed that there isn’t a main reason behind
globalisation. Globalisation is considered to have just progressed over the
years. Secondly, globalization could be very influential however it’s an
unknown occurrence and the predictions of its outcome will not be known for
many years down the road. After the Second World War, a development of
economics was created in belief that LDC’s (Less developed countries) could not
follow the same footsteps of the more developed countries. Additionally,
TNCs (transnational corporations) were to help bring wealth and foreign currency to local
economies when they buy local resources, products and services and therefore
the extra money created by this investment can be spent usefully on education,
health and infrastructure for them countries.

 

Many countries were led to develop distinctive non-market
policies to rapidly industrialize their economies. LDCs faced an already
developed capitalist world which needs time to be able to catch up on certain
policies and thus it was argued that some structures required for a sustainable
market system weren’t made in some of the developing countries and therefore
they had to be constructed before the integration of economies into the global system.
The positive effect globalisation can have is
the Inward investment by transnational corporations helps countries
by helping and providing new types of employment through jobs which requires different
skills for local people.  Structualists
wouldn’t particularly agree with the way some of these problems are addressed
but they believe and argue that if the business environment is to be
constructed in such a way as to enable globalization to increase growth, stability
and development over time then those issues had to be addressed and resolved.

Structuralist writers further believe that the same common
changes have occurred from globalization but there isn’t a specific way of how
these changes came. This perspective believes that the range of factors
influencing processes of globalization is much greater, and the outcomes of
globalization are very vague. Also, the increases in technology and the trade
liberalization or governmental policies have lead to globalization benefiting a
lot of countries and this dire increase in globalisation has lead to an enhance
in inequality amongst nations, as well as an increase in the inequalities
between the development of individual countries.

 

In conclusion, globalisation can be defined in different
perspectives, the way it has changed policies in the world and how nations are
conducting business in the world are very important. Each individual competing
view has different viewpoints on what causes globalization and how
globalization impacts the world. There are also several theories of
globalization that need to be understood. It’s vital to have a clear
understanding of the trends and views of globalization to be able to understand
how it affects the modern business world and society as a whole.

 

References

Globalization: A Very Short
Introduction: Steger, Manfred B.

 

Wetherly, P. and Otter, D. (2014). The Business Environment. pp.263-274.

 

http://www.economicsonline.co.uk/Global_economics/Globalisation_introduction.html

On the Principles
of Political Economy and Taxation (Excerpt from On the Principles of Political Economy and
Taxation by David Ricardo. 1817.)

 

Czaputowicz, J. (2007). The Influence of
Globalization Upon Public Governance. Public Administration (16484541), 26-33.

 

http://www.freepatentsonline.com/article/Journal-International-Business-Research/263035541.html

 

“Globalization:
trends and perspectives..” The Free Library. 2011 The DreamCatchers
Group, LLC 16 Jan. 2018 https://www.thefreelibrary.com/Globalization%3a+trends+and+perspectives.-a0263035541

 

https://www.economist.com/blogs/economist-explains/2014/09/economist-explains-0

 

Theories of Globalization

 

http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev2.shtml