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The term globalization has attracted the interests of many scholars and researchers across the globe with many arguing that globalization is an irresistible trend. Attempts have also been and continue to be made in not only defining the concept of globalization but also in widening its usage to cover new and emerging global trends. Lechner 2009 defines globalization as the process through which societies are integrated by eliminating geographical, legal as well as political barriers. Globalization is also described as the process that is working to create a single economic space around the world. Such integration of the world into a singular economic zone utilizes advancements in technology especially the presence of a networked telecommunication system globally.
Corporate bodies are making a significant contribution towards attaining economic globalization. Corporations are taking advantage of relatively lower carrying costs, accessible communication channels and liberal trading policies in producing and distributing products around the globe. Companies outsource their production processes to countries that offer relatively cheaper labor to maximize on their global profit margins. Economic globalization does not only present opportunities but also comes with its own challenges. Some people and nations have, over the years, derived greater benefit leading to the widening the gap between the rich and the poor. Arguments have been raised concerning the need engage social reforms in saving the most vulnerable groups around the world.
The following section explains the connection between the economy and globalization. It also looks at how the two affect each other using economic and sociology theories. The theories considered in this study are Marxism, neoliberalism, political globalization and global poverty and inequality.
The Marxist Theory on Class and Global Capitalism
The Marxist theory named after its founding father Carl Marx acknowledges the existence of classes and capitalism across the globe. Marx argued that ‘the tendency to create the world market is directly given in the concept of capital itself’. There is a clear link between class and capitalism. The Capitalists attempt to influence the working the global economy by working to fit into existing international class systems in their global operations. The Marxist theory makes five important assumptions concerning international relations. These suppositions are people’s economic position shapes politics, their socio-economic classes based on their economic standing influence societal operations more than individuals and states and the ruling class controls the present day states. The other postulations are that the shaping of relationships between workers and capitalists is usually by class conflicts and revolution being the greatest source of political change.
Advanced industrial countries work towards protecting and advancing their global capitalistic interests. Transnational businesses are instrumental in controlling international politics in order to reap higher returns due to their global presence. Capitalist class has therefore played a greater role in the globalization of the world economies by outsourcing raw materials and cheaper labor with a view to protecting their societal positions. Capitalists target maximizing their returns necessitating the need to access a wider geographical market. The approach that takes into consideration analyses on class in line with the global capitalism continues suffers criticism for two reasons. Firstly, its concentration on economism makes it hard to objectively compare the overall benefits that nations are able to derive from globalization. Secondly, Marxism approach to the study and understanding of globalization focuses more power relations as opposed to class.
Neoliberalism and Globalization
Neoliberalism thought of an updated adaptation of the classical liberalism, dominated the US and the UK economic policy-making for decades before the great depression of the 1930s. The US has been successful in implementing neoliberal policies around the world either using pressure or by acting through international monetary bodies such as the IMF and World Bank. Neoliberals support for the creation of ‘a free global market economy’ that allows free flow of products and services has been instrumental in the expansion of a global economy a phenomenon known as globalization. The call for deregulation of businesses, reduction of taxes on business entities and privatization of public activities has led to the expansion of corporations to cover a larger market globally. Neoliberalism approach has had a greater effect with regard to globalization following its re-emergence and lasting during the 1970s and the early 1980s. Its favorable economic effects on the performance of capitalistic economies explain its resurgence in the recent times.
A number of weaknesses are associated with neoliberalism approach to globalization. Neoliberals definition of a free market fails to take into account both political and moral issues that guide market operations. Proper definition of market failure needs to be pegged on the fundamental economic theory that is useful in defining an ideal market that has neoliberalism as just one of its constituent theories. In addition, the failure of the drastic neoliberal change programmes in ex-socialist and developing economies would not have been had natural markets been in existence as argued by neoliberal theorists. The determination of prices of products and services within markets is in most cases politically controlled. The suggestion by neoliberals concerning the de-politicization of the market is ill motivated and only serves to eliminate political aspects that they are opposed to, for example trade unionism.
Recent times have witnessed an overall growth in the global trade. Such expansions in international trade and markets have created the demand and need for political globalization. The attainment of political globalization has been made possible due to the emergence of both national and global nongovernmental organizations that control the working of governments. Values, human rights-related norms, thoughts of human development together with internationalism beliefs have played a critical role in the realization of political globalization. International human rights bodies have become interested in both the existing as well as new policies that are formulated by governments to guide human relations.
Political globalization has negatively reduced the importance of national governments as global citizens have a good understanding of their rights and as such demand the formulation or adoption of superior laws. Institutions that unify nations such as the European Union, the World Trade Organization and the International Criminal Court among other bodies shape the political regimes of member countries. Philanthropic organizations with a global presence have also been instrumental in demanding for the formulation of political governance policies that target enhancing better co-existence among global citizens. Some countries such as North Korea have, however, continued to lag behind by embracing isolationist policies that make it hard for foreigners to enter their country. Citizens of such nations cannot also leave their country at will.
Global poverty and Inequality
Happenings in the lives of the poor with regard to their living standards have in the recent past dominated the globalization debate. Such debates are centered on not only the continuing deprivations but also on rising levels of disparities between the rich and the poor. The ranking of nations depending on their poverty levels has led to the rise in philanthropic actions by well wishers from around the globe towards the worst hit nations. Issues of inequality, that is, disparities in the levels of living, measured by how much wealth is held by the rich vis-à-vis that which is available to the poor, have also led to globalization.
People all over the world are touched by stories of those struggling to make ends meet. As such more and more activities are being initiated each passing day with a view to ensuring that the marginalized groups attain better living standards. The divergence of efforts by global citizens in addressing these two critical issues has played an important role in unifying the world and thereby creating a global platform through which people interact.
The question then is which approach is better or more convincing than others are in creating understanding of globalization. Marxism, neoliberalism, political expansion and global poverty and inequality are useful factors in defining globalization. Their individual contributions in achieving this goal vary from one to another. One needs to understand the assumptions that guide each criterion in their assessment of global operations together with the prepositions that are crafted in the process. A good theory has to be clear in explaining the current situation by studying all the variables that are critical to the understanding of globalization as used in the world today.
A number of forces have each worked in the realization of a global economy where firms are able to compete in serving the global customer. Advancements in technology particularly the development and expansion of the telecommunication sector and the internet together with the adoption of advanced transport facilities made the world a ‘large village’ that is easily accessible to product and service providers. To properly understand globalization, a person has to compare and contrast all the theories that explain the concept. The utilization of all the theories reduces chances of drawing erroneous conclusions at the end of the study.