Globalization mainly involves interaction and integration among people, companies, and governments across the world. It has accelerated since the 18th century due to advancements in transportation and communication technology.
Globalization is a growing interconnectedness between sovereign nations in the world in multiple sectors like social economic and political. It also influences the cultural aspects of the globalized states.
There isn’t a particular start date for the phenomena. some say it goes back to the ancient ages, other theorists say it was more prevalent before the 1990s and yet others argue that it had phoned the most influence after the Cold War. It is closely related to the privatization or opening up of the economy.
There is a borderless connectedness and a world that is created in between globalized states. Every action we do or not do is transferred to other parts of the world. Therefore any action in one part of the world is likely to influence other parts of the world in any sector.
Be it any economic, political, cultural, or other social aspects. Globalization brings about a borderless state which limits most function and control that states had before the period of globalization.
Impacts of Globalization
What It Does?
Globalization is closely linked to the opening up of the economy by the states. this means that the state loses control over the market economy greatly. Protectionism doesn’t work anymore in a true globalized state.
This opens up the economy to the market competition which makes the production competing with any other in any of the other globalized states in the world.
When any commodity is exposed to outside competition, there is a lot at stake for the commodity. this is because the other products could have established support going out for them.
This support could be in the terms of quality, price of a good, its brand name, eurocentrism, and other factors making them more or less desirable to the consumers accordingly.
In the third world nations, this is a huge set back because most of their economies are growing economies and not established fully. For example, an indigenous company or industry like the textile industry cannot lower its price for consumers seeing outside competition.
To make profits, it is impossible to do so. On the other hand, a better-industrialized state would obviously earn more and it is easier for them to do so to grab attention. Another example is how we prefer McDonald’s over any Indian restaurant.
This is how brand name influences consumers in globalization. The clothes we wear, the materials we buy, all are influenced by the concept of globalization.
Negative Effects of Globalization
Joseph Stiglitz asserts that globalization could be either an accomplishment or a disappointment. It is all about how it is managed and executed.
“There is a success when it is managed by the national government by embracing their characteristics of each country; however, there is a faith lure when it is managed by international institutions such as IMF.”
According to Joseph Stieglitz- the Nobel Prize winner in economics, globalization is a facade for the greater capitalist economies to earn benefits from the needier sections or the third world nations.
In his book, he refers to how the globalized economic institutions like the IMF and World Bank have affected the statutory conditions of protectionism in States.
The constant pressures and influences made by the western thinkers saying the only way out of poverty would be to open up states is a way of exploiting the third world states even more.
From easily getting a cheap, intelligent, and skilled workforce to set up industries in these countries, it blocks the way of the third world states to grow on their own and become self-sufficient.
It ignores the fact that Nations like Korea, Malaysia, and other Asian societies have developed without being exposed to the capitalist mode of production. This is a major flaw in the very idea that globalization is the only way out of impoverished states.
Conclusion
There have been more negative connotations to globalization in third world countries. It has mostly benefited the already established industrialized states. The third world countries are vulnerable to competition and often get caught up in debts and loans.
Whether an economy is ready for opening up or not or whether there is a stabilized government to deal with the outside world still has no concrete answers other than the results which shows that the globalized third world countries have not benefited from it yet on the basis of what it was promised.
Written by - Aatreyi Dutta
Edited by - Aishwarya Khandekar
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