Explaining globalisation and what effect it has on the world

Published: 05 December 2010

Globalisation is the new fault line on the world’s ideological map. A lot of people support globalisation but some don’t.

So, is globalisation good or bad for the world?

To define globalisation, it is the process where economic, political and cultural activities across the world have become interconnected and individuals and nations find themselves influenced from a distance.

Globalisation as a word is also used, in a doctrinal sense, to illustrate the neo-liberal form of economic globalisation. In neo-liberal eyes contemporary globalisation has gone hand in hand with democratisation.

According to liberalists, “globalisation will help the whole world to deal with crises like unemployment and poverty. It will help us to raise the global economy only when the involved power blocks have mutual trust and respect for each other’s opinion.”

According to J. Scholte, his definition of globalisation can be described in at least 5 definitions: globalisation as universalisation, as liberalisation, as internationalisation, as deterritorialisation or supraterritoriality, as modernisation or westernisation.

Globalisation has undercut liberal democracy through the state and created the need for supplementary democratic mechanisms.

The collapse of Soviet-type central planning reinforced the faith of neo-liberals, and seemed to mark the final victory over socialism. Fukuyama argues, “At the end of history, there are no serious competitors left to liberal democracy”. For marxists, globalisation is the latest stage in the development of international capitalism.

 It is widely believed that globalisation of capitalism involves the extension of a self –regulating and efficient economic order. The authors of the Communist Manifesto had pointed out that the growth of bourgeois society had ‘given a cosmopolitan character to production and consumption in every country.’. It has also created a wider gap between proletariat and bourgeois society in terms of that the capitalists became richer and the poor became even poorer. Paul Prebisch argues that countries in periphery suffer more than the core countries and calls this "the declining terms of trade".

Globalization allows an efficient exploitation of less well-off nations and reinforces Western and particularly US hegemony in world politics. Microsoft was fined 497m Euros in March 2004 when found guilty of abusing its dominant position as the market leader.

Social structures of modernity such as industrialism, capitalism and bureaucratism are destroying pre-existent cultural identity of the non-western civilisations. The world is becoming more homogeneous which means that differences between people are diminishing.

According to theory of modernisation, industrialisation alters the nature of state, both widening its responsibilities and weakening its control over outcome. Force becomes less usable and states have to negotiate with each other to achieve collective security and growth.

Global institutions use cosmopolitanism to set standards or boundaries that no agent should be able to cross but it presents a radical critique of distorted global politics  in terms of global inequalities which leads to global injustice. Realizing a more humane and just world order requires a more democratic system of global governance which can at minimum regulate global markets and prevent transnational harm to the most vulnerable.

There is now increased political pressure on G8 governments especially to bring good governance to global governance by making it more accountable, transparent and legitimate.

In terms of global human rights, campaigns and other trans-border civic associations pressed for an end to authoritarian governments.

Regional and trans-world agencies have supplied various forms of democracy support, for instance, civil society development through EU programmes, election monitoring through the UN; and ‘good governance’ promotion through the Bretton Woods institutions.

WHO presents information that 25 % of all diseases and injuries worldwide is connected to environmental decline attributable to globalization.Since World War II, barriers to international trade have been considerably lowered through international agreements - GATT. GATT and the WTO wanted to promote free trade to boost the economies of the countries (e.g. harmonisation of intellectual property laws and elimination of tariffs).

Chinais a huge influence in the world of globalisation. After China joined WTO in 2001, it has monopolized a lot of the markets world-wide. Exports were aimed at serving imports and foreign trade was aimed at serving national industrialisation.

The 1980-1995 time period shows the importance of increased direct foreign investment because it boosted the economy of international tourism from the rise in numbers of international telephone calls to the increase in international criminal activity.

Globalisation also is described as McDonald’s hyper-capitalism which means continuation of Western domination. The fact is that globalisation does not threaten the welfare-state or nation-state. Their future survival is guaranteed. Evidence to that is the rising number of members of UN from 157 to 184 between 1980 and 1995.

“Governance, in the United States and around the world, is undergoing a fundamental transformation that is redefining institutional roles and straining the capacities of all those involved in the pursuit of public purpose”.

Governments are increasingly adopting as a goal the replacement of “administrative, hierarchical, and professional cultures” by a “private, commercial, market culture”.

In Kettl’s characterisation, “these reforms sought to replace traditional rule-based, authority-driven processes with market-based, competition-driven tactics”.

When free trade integrated into the world market Europeans were in fear of losing their jobs because of outsourcing work to the Asian countries since the cost of labour is lower than in Europe. E.g. many telephone network companies base their call centres in India. Some experts believe that globalisation leads to social degeneration and communicable diseases.

Competition keeps the prices low and inflation is less likely to occur. None of the countries remain single power head; instead there are compartmentalized power sectors. There is a rise in communication among countries and interchange of cultures.

To conclude, contemporary globalisation has altered the dynamics of production, governance, community and knowledge. Due to expansion of globality it needed to adopt different features and share regulatory functions with substate, suprastate and non-state entities. Globalisation is good for many states though not for all, but it unites the states through non-state actors which makes them more dependent on each  other and it has also improved the lives of capitalists and made the lives of poor even poorer.