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Globalization in economics and its consequences

Thomas Friedman, in the book “The Lexus and the olive tree” defines globalization as not being a phenomenon or a passing trend, but an international system that shapes domestic, political and foreign relations in every county. Globalization is a principle that in today’s modern world shapes, molds and manages resources. Other scholars view globalization as a way of identifying a set of interactions and often encountering heterogeneous groups.

globalization economics

Globalization has created new rules of the world that enable for exploiting of other countries for raw materials and labor in order to meet the constant demands of the west. Other countries here may, without any direct reference, mean the poor and possibly developing countries. Globalization can be viewed through global society approaches which include: Citizens of one planet approach. This is where nations view themselves as citizens of one planet with common concerns and possibilities. They are then made aware of how globalization affects their common lives. The global culture approach, which advocates for the increased cultural harmonization due to little local resistance of change. People then consume the same music, food, social lifestyles. The world systems approach. This is the dominance of capitalism where the advantaged exploit disadvantaged societies while advocating for consumerism. This is done by creating desirable lifestyles.

Media content is developed in such a way that news sources are individuals with prominence and who can influence social norms, beliefs, ideologies and values. Media is used to dupe audiences subconsciously to spread new and immediate but distant social realities that do not necessarily apply to the audiences’ lives. They out rightly ignore existing social norms, which have also led to the redefining of gender roles. Skeptics however view globalization as a one sided affair by the west that is used to create economic dependency amongst developing nations.

Transformers see it as having re-defined global orders, though governments are still powerful despite the ‘breakdown’ of borders. It is a vehicle of political, economic and social domination of third world countries aimed at passing on cultural products that are aimed at creating a homogeneous global culture. In all this however, globalization is agentless, though it has led to hegemony, which is the control by one country or organization over other countries within a particular group. There are no central guiding forces towards what exactly is the global culture set by globalization though some of the major consequences of globalization in the world include:

  • De-regulation of economic markets in most developed and developing countries, which has led to the standardization and mixing or homogenization of economic practices worldwide.
  • Introduction of global communities where transactions can be rendered immediately on the internet, thus making temporal statistical and currency differences irrelevant.
  • Increased access to audiences and economic markets thus increasing and expanding product delivery and better capital gains through mergers and acquisitions. This has allowed for plurality and diversity in production.
  • Globalization has also led to intercontinental relations enhanced through technological and transport infrastructure developments.
  • Advancements in Information Technology also drive globalization. Improved ICTs have led to trans-national corporations breaking across existing natural borders, which have in turn promoted standardization laws in terms of production and distribution processes of goods and services.
  • Globalization has made government importance to seemingly decline since global financial markets have taken over, handling large volumes of national capitals. Nations still have their sovereignty, but global networks have restructured economic, social and government organizations to be internationally friendly.
  • Globalization has turned nations into ’24 hour’ economies where working hours have been restructured to fit existing international economies. Jobs have changed to be more time flexible as employees strive to be multi-skilled and multi-functional. Individuals have also re- invented themselves to fit into the global order through the internet.

“Globalization has led to the compression of the world, intensifying the consciousness of the world as a whole.” Roberts (1992) “Globalization has led to shrinkage between the distant and local,” Giddens (1999). People can engage in discussions, join groups over the internet and participate in communication without the conflict of time or space. The mobile phone has also evolved into a business tool for economic engagements.

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