What has been the impact of globalisation?

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What Has Been The Impact Of Globalisation?

Globalisation is, as Bhagwati stated “The integration of national economies into the international economy through trade, direct foreign investment, short term capital flows, international flows of workers and humanity generally, and flows of technology”.

The term globalization is increasingly used to describe the ongoing integration of the world within a capitalist political economy. Supporters of globalization point to the emergence of the middle-class in developing countries, economic growth within peripheral economies, the continued expansion of global stock markets, democratization and the emergence of a global culture as signs of the benefits of this process. Critics of globalization point to the rising gaps of inequality between nations and within all nations of the global economy, increased environmental degradation, especially in the developing world, the loss of sovereignty, cultural imperialism and the rise in extreme nationalism as indicators of the downside of this process.

The economics of globalization represents the contemporary process of capitalist accumulation. This process is manifest through global commodity chains and a global division of labour, the global mobility of capital, the increasing concentration of industries into a small number of transnational corporations, the development of global regulatory institutions, and a shift in world trade from goods and services to financial instruments. At the centre of this process are international elites who have been able to bring the world economy under the domain of multinational corporations without losing the national economic priorities of the leading core states. Although the relationship between governments in the core states and elements of the international elite has been mainly harmonious, at times it is prone to tension and overt disagreement.  Economic globalization can be demonstrated empirically by looking at the increasing percentage of world trade as a percentage of world production. The Human Development Report (HDR) notes this increase in international trade “world exports, now $7 trillion, average 21 per cent of GDP in the 1990s compared to 17 per cent of a much smaller GDP in the 1970s”. This growth in international trade is necessarily accompanied by increasing transnational linkages in production, which is further facilitated by technological improvements undertaken by transnational corporations in core capitalist states. Economic globalization has accelerated because of the post 1960s “electronics revolution,” which transformed the quantitative possibilities of transferring cash and money capital into qualitatively new forms of corporate and personal financing, entrepreneurship, and, crucially, the system of credit on which the global culture and ideology of consumerism largely rests. In 1980 average daily foreign exchange trading totalled $80 billion, today it is estimated that more than $1,500 billion changes hands daily on the global currency markets.

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The politics of globalization is represented by the emergence of global governance and the increasing contradictions between and within nation states. The central political tension of globalization rests between increasingly powerful transnational institutions (like the World Trade Organization, United Nations, World Bank, International Monetary Fund, as well as multinational corporations) and sovereign nation-states over the regulatory landscape of global capitalism. Globalization involves a shift in organization from a nation-state level to intra-regional and transcontinental levels of political organization. This means that the relationships between nation-states are increasingly mediated through institutions of global governance. Areas of national sovereignty are being redefined, ...

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