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Benefits and risks associated with globalization.

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Benefits and risks associated with globalization. By Lukasz Niegowski Abstract Globalization is a powerful real aspect of the new world system, and it represents one of the most influential forces in determining the future course of the planet. It has many dimensions: economic, political, social, cultural, environmental, security, and others. The evidence of globalization can be seen everywhere: in the home, in the workplace, in the discount stores, in the newspapers and business journals, in the flow of monthly government statistics, and in academic literature. The focus here will be on the concept of "globalization" as applied to the world economy and political system. This concept is one that has different interpretations to different people. Partly as a result of these different interpretations, there are very different reactions to "globalization," with some seeing it as a serious danger to the world economic and political system while others see it as advancing the world economy and good influencing on nation governments. Saying in a simply way I would like to present benefits and costs of globalization. A short economical definition of globalization is "the growing liberalization of international trade and investment, and the resulting increase in the integration of national economies." ...read more.


There are at least couple of fundamental blessings of globalization that is really important for the whole world : - Reductions in poverty - Faster economic growth (expansion in international trade) - Growth of the multinationals - Environmental standards - Information flows across nations - Respect for intellectual property rights - Wider variety of Goods and Services have become available at lower prices - Lower-cost and timely access to Information that reduces transaction costs, and accelerates the process of catch up - More choices for development Finance - Lower costs of cross-border trade and spot operations due to a harmonization of Standards - More fertile soil for democracy - Global Corporate Activities connect national economies- consumers and producers alike, create marketing channels, and diffuse technology (technical and managerial) - Improvements in product quality In the other hand there are also negative sides of globalization. In theory globalization can have a positive impact on agricultural growth. In practice globalization benefits those with technology, resources, contacts, information and access to markets. But it has negative impact on the poor. There are always winners and losers. Winners: o The purveyors of globalization o The owners of technology o The owners of skill o The affluent, rich nations of the world. ...read more.


From a political perspective, the most important question is not an abstract discussion of "who benefits the most from globalization", but: "How is globalization perceived by those who live with its effects?". Even if globalization were to be bridging the gap between the rich(est) and the poor(est), we would still have a problem if the poor(est) somehow feel otherwise. We would still have a problem if the poor feel just as powerless, just as marginalized, just as alienated as before. In a world of rising expectations, fueled by CNN and increasingly also by the Internet, perceptions of reality are fast becoming just as important as reality itself. If we believe free markets unleash forces that are destructive to human happiness and must be controlled by active government intervention, we will tend to see globalization as a threat. If we believe that free markets, operating within a rule of law, are essentially self- regulating and lead, in the words of Adam Smith, "as if by an invisible hand" to a greater general prosperity, then we will tend to see globalization as a blessing. 1 1.David Henderson, "The Changing International Economic Order: Rival Visions for the Coming Millennium," Melbourne Business School, 9 Sept. 1999. 2 1 ...read more.

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