Jane Globalization has impacted almost every part

Jane Ogagan

International Political Science for Public Health Practitioners

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Seminar Course: 221.614.01 

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Topic Choice 18: “On balance, globalization expands rather than contracts opportunities for economic prosperity around the world.” Why do you agree or disagree with this statement? Please support your answer with appropriate examples.

 

            Globalization has impacted almost every part of the modern world; it can be characterized by economic, political, and cultural integration. Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, a flow of international capital and wide and rapid spread of technologies (Shangquan, 2000). Many continue to argue about the advantages and disadvantages following globalization. Most civilians are against globalization, fearing the negative aspects will outweigh the benefits, while economists believe that globalization is the most widely accepted solution to ensure consistent economic growth (Kuepper, 2017). Because of its usefulness with businesses in less industrialized countries, ability to increase Foreign Direct Investment (FDI), and increases economies of sale, I believe globalization expands rather than contracts opportunities for economic prosperity around the world.

With the integration of markets on a worldwide basis, globalization can lead to more access to capital flows, technology, and cheaper imports and larger export markets. Globalization has included openness in the international economy, and progress towards a borderless world. This permits more opportunities for businesses in less industrialized countries to tap into more, larger markets around the world. The inherent link between trade and growth constitutes a real possibility for developing countries to escape their poverty and benefit from the international relationships with foreign businesses (Sosa, 2004). For example, Chile has benefited from the advantages and international trade opportunities offered by globalization. Chile’s government stopped solely focusing achieving self-sufficiency through the domestic economy and, rather, placed an emphasis on exports.  This broader outlook, according to Rosenberg, helps lead them towards integration into the global marketplace (Rosenberg, 2002).

Additionally, globalization allows for the concentration of labor in agricultural and industrial economic production (Sosa, 2004). This means the implementation of the concept of comparative advantage, which describes a country’s need to access information and discharge new technology to capitalize at what they are best at doing (Sosa, 2004). I believe Mitchell’s statement “when countries open their border to trade, they tend to specialize in producing goods and services that intensively use their most abundant factors of production” (Mitchell, 2002) is quite accurate. The benefits of implementing global production reside in the opportunities of taking resources from different areas of the world, and profiting from the national differences in the cost and quality of the production factors (i.e.labor, energy, land, and capital) (Sosa, 2004). By allotting the resources and capital invested to obtain those assets effectively, businesses can ultimately reduce their overall cost structure and improve the quality and functionality of their final products, measures that hold greater competitive potential in the global market (Hill, 2003).

With globalization, changes in institutions, where organizations have a wider influence, due, partially to changes in technology and diversity of business management. With these changes, corporations that had primarily focused on a local market have expanded their range in terms of markets and production facilities to a national, multinational, international, or even global reach (Sosa, 2004). These changes in industrial structure have led to increases in the power, profits, and productivity of those firms that can choose among many nations for their sources of materials, production facilities, and markets, quickly adjusting to changing market conditions. Virtually every major national or international enterprise has such a structure or relies on subsidiaries or strategic alliances to obtain a comparable degree of influence and flexibility (Sosa, 2004). As one measure of their scale, almost a third of total international trade now occurs solely within these multinational enterprises. With the advent of such global firms, international conflict has, to some extent, moved from nations to these firms, with the battle no longer among nations over territory but rather among firms over their share of world markets. These global firms are seen by some as a threat to the scope and autonomy of the state, but, while these firms are powerful, the nation state still retains its traditional and dominant role in the world economic and political system and is likely to remain in this role. (Waltz, 1999)        

As aforementioned, globalization has helped to reduce global poverty and to increase the welfare of both developed and developing countries. Globalization has, however, impacted different groups differently. Some have benefited enormously, while others have endured more of the costs. The developed countries could continue to get more economic benefits from the less developed countries through economic globalization; meaning that inequality between the rich and the poor countries still remains as a serious threat in the global economy (Intriligator, 2004).  Though this issue is serious, it is unlikely to be a long-term problem; as time continues, both developing and developed countries around the world will equally benefit from globalization.

 

Globalization impacts almost every aspect of the modern world and continues to be a growing force in the global economy (Kuepper, 2017). While there are a few drawbacks, most economists can agree that it is both unstoppable and net beneficial to the world economy. In the past, there have always been periods of isolationism and nationalism, but globalization has continued to be the most widely accepted solution to ensure consistent economic growth around the world.

 

Citations

Hill, Charles W. L. International Business: Competing in the Global Marketplace. 4th ed. New York: McGraw-Hill, 2003.?

Intriligator, Michael D., 2004.”Globalization of the world economy: potential benefits and costs and a net assessment,” Journal of Policy Modeling, Elsevier, vol. 26(4), pages 485-498.https://ideas.repec.org/a/eee/jpolmo/v26y2004i4p485-498.html

 

Kuepper, J. (2017). Globalization and Its Impact on Economic Growth. online The Balance. Available at: https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-1978843 Accessed 13 Dec. 2017.

Mitchell, Alan. “How Trade Helps The Poorest Nations.” Australian Financial Review 16 Nov 2002.: 63. Lexis-Nexis. Robson Library, Clarksville, AR. .?

Rosenberg, Tina. “Globalization.” New York Times. 18 Aug. 2002, Sunday late ed.–final: 28. Lexis-Nexis. Robson Library, Clarksville, AR. .?

Sosa, Karla. “Globalization and Economic Development in the Third World: Hazard or Enhancement?” 2004

 

World Bank, Globalization, Growth, and Poverty: Building an Inclusive World Economy, Washington DC: World Bank and New York: Oxford University Press, 2002