From Local to Global: My Perspective on Globalization

We as a species have come a long way from when it is first believed to have separated from our closet living relatives, the chimpanzees about 4- 7 million years ago. Much has changed for us since then, along with our needs and demands and the ways to bring about it happening. Lucky for our gift of pattern recognition in specific, our intelligence in general with natural selection through the environment already at its play, we have achieved great heights and are now the dominant species on earth. Modern humans standing on the shoulders of predecessors with knowledge and innovation have revolutionized the world and the way we live in it. Unfortunately, we can’t say the same about our cousins who been evolved to intelligent being but still at times remains a source of embarrassment when encountered. To share my perspective on globalization, in this essay I reflect on the evolution of humanity from its early beginnings to its current status as the dominant species on earth.

Not just us that have changed for better or for worse, we have changed the world around us in many ways than we can imagine. Our actions creates a domino effect whose true impact cannot be fully realized until the phenomena undertakes or the situation occurs. One such phenomena is Globalization. With technology fueling our growth, the world has become a small place with regards to communication and mobility. Globalization is the result of such advancement of our species as we move ahead towards bettering our lives and the world we live in it. With trades undertaking and movement of resources be it labor or capital across political and geographical regions, globalization as a process has ever grown in size as more and more participant move towards integration. This is evident even when we look around as we are surrounded by the products and services as a result of globalization. For better or for worse globalization is wide spread and into our lives. A simple example illustrates this fact. We have more cellular phones currently than the total human population. The devices itself may have been assembled in particular nation however the component into it comes from various corners of the world. From ordinary toothpaste to life saving antibiotics all this been accessible and now a part of our daily lives is only possible through globalization. While consumer choices and efficiency in producing them has greatly been increased through increasing trade and involvement of institutions government and multinational companies in this complex and wide spread phenomena, it does come with serious downside and challenges. The most general one of being inequality in terms of the financial distribution of the benefit achieved. Other problems like job losses and macroeconomic problems have also surfaced.

Looking over the brighter side of facts within what globalization means to me essay, globalization has been attributed to economic prosperity namely through reduction of poverty via better allocation of the scare resources. Here the international trade comes into the picture, wherein, it enables to produce more and consume more while remaining frugal with the resources. The idea is to produce the goods that one is most efficient to produce and create a surplus and trade the surplus with other necessary goods which the nation or the institution in region may not be as efficient in producing. By doing this, it allows for better allocation of resources, cost reduction and more choices for the consumer. For example, the Caribbean country of Cuba is better at producing bananas while their counterpart neighbors like the USA may be good at producing manufactured goods like electronics or vehicles. Both nation through free trade and reduced taxes can enjoy the both products with minimum use of the resources while increasing the overall efficiency at producing the goods.

Another advantage usually associated with globalization in the increasing overall labor productivity and share of technology. The labor involved in the production of goods are services through the division of labor and specialization produce a surplus while increasing the efficiency in producing them. This has been seen as an increase to the productivity of the labor. By specialization in what the labor in good at, more output is produced with the same resource which in turn reduce the cost of production and help in keeping the prices low. Along with the movement of capital or labor, technology is also shared between the partners. For example the incoming of multinational fashion production houses like Zara and Adidas in a developing nation like Bangladesh. By welcoming the foreign direct investment, the local labor is not only employed but receives training and skills provided by the MNC. The local economy also receives the technology involved in production which can be shared with the locals and can be further used to increase production. One specific example related to the transfer of technology can be evidently seen is in productions of weaponry, ammunitions, aircrafts etc. for example the Indian government buys fighter jets from France with terms of transfers of technology wherein, some planes are made in India with local labor and resources which provides them with the vital knowledge and skill required which basically accounts to transfers of technology. This saves vital resources for India, namely capital and time, as resources can be saved in Research and Development which could otherwise been used.

In relation to the economics and resource, globalization also helps in reducing the cost of the goods and services which in turn trickles down to consumer with lower prices and more choices, over all increasing the efficiency in the production process. Widely known example to this is seen in outsourcing of stages or parts of the production process. For example a US based company outsources its manufacturing process to labor intensive market like china where the labor cost are significant lower than US. As result of which, the same product is produced with less cost which helps again to lower cost and increase profit for the producer. Adding to the above benefit is the reduction of poverty as more and more integration and trades takes place while the growth and production increases. The best example now would be china. As the country opened up its economy and started to trade in the advent of globalization, it allowed the economy to produce more and trade more while giving more employment and creating more demand. As a result we see now, china has become one of the manufacturing hubs and its GDP has steadily increased to 14 trillion as if 2019. While this seem pretty straightforward, the underlying facet is that the economy has improved significantly and more people can alleviate themselves above the poverty line. Again, this evident as the increasing numbers of middle class in China.

The advantages of globalization don’t seem to limit to economic factors only. It seems to affect geopolitical and socio-cultural aspects of our daily lives - this can be discussed within “how globalization is your home essay”. So not only has it connected the world through ranges of similar products and services, it allows for cross cultural encounters which help in better understanding and promotion of tolerance. This overall creates a sense of global citizens where differences are eliminated by globalization. The dependency of the each other as trades makes everyone better off, makes socio-cultural bonds and better relations and promotes cooperation among each other.

With example to this can be seen with the trade between china and Australia. As trade with these countries increased through the decades, more interaction between the people of the countries has been observed. The large about of immigrants being Chinese and large bunch of Chinese students studying in Australia is evident to that very fact.

Globalization been widespread and fostering since more and more trades and involvement between parties takes place, has come under some serious criticism. One of the major criticism of this world wide phenomena is the inequality of wealth it is suspected to create. As more and more of it is associated with income disparity which is also ironically widespread and ever increasing, globalization seems also a tradeoff. The general drawback here is in the resource sharing mainly the financial part. While it is generally accepted that globalization brings about mobility of capital and labor, however, the profits are seen to be not reinvested but rather transfers to the parent company or base. This is seen as major problem as usually the parent company come from developed nation while the host are developing nations. This is suspected to have given rise to the income inequality as capital is accumulated in the hands of few.

Another noticeable drawback seen with globalization is the problems with balance of payment and trade deficits. This particular problems can be better understood while viewing the trades between the developed nation and the developing nation. The idea is generally that the developed nation exports high quality expensive manufactured goods while their counterpart export cheap raw materials. Since much of the reserves are taken away in imports with smaller recovery with exports as a result, the developing nation with ever increasing trades and large imports may experiences trade deficit and balance of payment issues. For example, trades between India and United Kingdom which are categorized as a developing and developed nation respectively. India may export raw materials like cotton, or other cash crops or certain minerals and UK on the other hand may export manufactured jets or luxurious cars which can be hefty on the balance of payment of India. Along with it the import duties and VAT can increase the import prices further which pays a toll on the budget of the consumers.

While this remains a disadvantage to the developing nation, globalization doesn’t spare the developed nation with its share of problems. The major criticism here is the jobs losses that results due to outsourcing in the name of cheap labor elsewhere. The outsourcing has resulted in many job losses as manufacturing is shifted to labour intensive nations like china and india where labor is cheap and abundant. This is clear with many industries like manufacturing, software development and agricultural where job losses are notably been observed. This further fuels problem that an economy faces with unemployment and and reduce in demand.

According to conservative estimates by Robert Scott of the Economic Policy Institute, granting China most favored nation status drained away 3.2 million jobs, including 2.4 million manufacturing jobs. He pegs the net losses due to our trade deficit with Japan ($78.3 billion in 2013) at 896,000 jobs, as well as an additional 682,900 jobs from the Mexico –U.S. trade-deficit run-up from 1994 through 2010.”

This again further put financial pressures on governments and institutions with unemployment benefits and social security. Also is the cost which is now required to retrain and reenter the workforce. With trades increasing in manifold over the decades, it has required the government to increase protectionism as local business and domestic production are at risk due to unethical practices like dumping and predatory prices practices. Similar to this is the job losses due to cheaper imports due to trades. For example, larger nation may dump surplus goods at very lower prices where the local market cannot compete with such pricing which results in shutdown and eventually job losses. For example, the opening of large retail stores can affect local markets and the larger MNC can afford to lower cost.

Beside the economical drawback which the globalization as a phenomena possess, it has also been critised for the degradation of environment and exploitation of labor mainly in the developing nation wherein it may lack proper laws. Many of times it has been reported widely that various MNCs operating in developing nations have been accused of violation of labor laws or environment laws as due to the lower levels of awareness in developing nations regarding the full impact of such decision. This may have been another reason for the transfer of production in developing nation’s as well. Another financial motivator which can be seen for such shift towards developing nations is the ease of entry into markets and tax exemptions placed. It is also found in few of the cases that the MNC operating using lobbist and financial power to provide incentive for their own betterment which is seen as influence on political sphere of the host nation. Globalization certainly has made more goods available throughtout the world, however it has also created the problem of overconsumption and pollution.

To conclude, globalization has also been seen to provide avenues for brand recognition and brand dominance which can have monopoly like features. Since globalization bring about more mobility and communication, it increases the vulnerability to widespread epidemics. Another minor drawback which effects all is the susceptibility to external shocks and events. This is well known as our dependence on each other ever increases. For example the 1970s when the oil prices got hiked, it affected the whole world. Similar was the case of the Global financial crisis in 2008 where events in America effected the whole world. The more integration there is the more the dependence hence it may curtail economic freedom and national sovereignty.

10 October 2022
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