Needle (2009) says “Globalisation is a process in which the world appears to be converging economically, politically and culturally. It is seen by many as a fundamental change where national borders become irrelevant, a process accelerated by developments in information and communications technology”. Putting it into a more simplistic definition he says; “Globalisation is about the increased interlinking of the world’s societies and their economies”. There are many definitions of globalisation, which one to use largely depends on the context in which globalisation is being discussed.
Many writers perceive globalisation as an old phenomenon because they believe it has been around from the onset of the 14th century. Also economists have been using the term since the 1980’s. It was only until the late 1990’s that the concept became well known. Charles Taze Russels, - an American Christian minister and entrepreneur, was responsible for the earliest written theoretical concepts of globalisation. It is argued that early forms of globalisation originated from historic empires such as that of the Roman, Parthia and the Han Dynasty.
Portugal is an example of a particular country which embraced globalisation from an early stage. The 16th century brought about a wide scale link between economies and cultures through Portugal’s global explorations. The colonisation of the Americas by Portugal and Spain brought about a lot of European trade during the 16th and 17th century. Global integration was on the increase.
Globalisation is believed to not be a new phenomenon because it is evident that it has been around from the late 19th century. It may not have been widely acknowledged because the increase of globalisation became slower after the first World-War. Many believe that the slowdown was brought about by countries introducing various barriers to entry in an attempt to anxiously protect their own personal industries. Globalisation increased at a faster rate towards the period of the late 2oth century.
An American journalist (writer) Thomas Friedman argues that globalisation has brought about a permanent change to the world and the changes have had both positive and negative implications.
International trade, investment and international finance have been the result of progressive international integration since the 1950’s. People came to work in mines and plantations after the abolition of the slave trade so there was an increase in labour migration. During the early 1970’s there was a decrease in labour migration as people stopped coming from developing countries to industrialised communities. Even now there are many laws that have been enforced to prevent any random individual from entering international boundaries. Since then globalisation has found substantial replacements for the mobility of labour. The solution was found in the form of investment and trade flows. This is ideal because of the fact that industrialised countries import goods that are produced by the use of scarce labour and they export the finance that is used to pay the individuals providing the labour in other countries.
Easy access to countries was a major factor that contributed to the globalisation of the world. During the late 19th century the mobility of people was very easy due to the lack of restrictions when entering national boundaries. Immigrants had no problem gaining citizenship in other countries. This was mainly down to the fact that Identification such as passports was not necessary for entry. The years 1870-1914 brought about a huge rise in international migrant workers as it was easy for them to enter any place they chose. Millions of people went to the Americas whilst some went to New-Zealand.
Travel infrastructure is another factor which has contributed to the globalisation of world trade since 1970’s. The development of steam engines, the railway, and the telegraph had brought about a whole new way of transport and communications. Things were made quicker because information no longer had to be passed on via boat transport (one of the main forms of transport before the development of trains and things alike.)
Since the 1970’s there have been many major factors which have been said to have caused Globalisation of world trade. One of the major factors is the increased use of technology and the improvement in technology. Improvements in technology have reduced the costs of trade. Technology is seen by many as one of the main driving forces behind globalisation. Shortening space and time would prove very problematic without the use of information and communication technologies.
Another major factor which is said to have contributed towards globalisation since the 1970’s occurred during the laissez faire period of the years 1870 – 1914. During this period, an environment free from hindrance was created to enable the movement of labour, goods, and capital across national boundaries. During this time, government intervention with economic activity was kept at a minimal. Many believed that this laissez faire approach was a major factor that encouraged the rapid increase of globalisation within that time period.
During the first World-War there was, understandably, a rapid decrease in the growth of globalisation. Concerning governments that strive towards privatisation of companies in order to minimise the role of the state and bring about the freedom of trade and financial flow flows the late 20th century brought about the redemption of globalisation.
Integration between countries occurs when countries get rid of, or lower barriers (for example import tariffs) and open their economies to global trade.
Countries in Africa, Asia and Latin America have not always fully benefited from globalisation because development was very uneven. This was evident in the income gap between the richest and the poorest countries which more than doubled in the year 1870 from what it was in the year 1820. Between 1870 and 1914, China and Indonesia practised free trade to the extent that the United Kingdom did. The average tariff levels in the UK and Netherlands at this time was 3% to 5%, whilst in India, China and Indonesia it was close to negligible. Germany, Japan and France had particularly higher tariff levels at 12% and 14%. The USA topped all at 33%. In addition to this, India, China and Indonesia received the largest rate of foreign investment. Between 1860 and 1930, the percentage of developing countries in world manufacturing output fell dramatically from one third to less than one tenth. Export became big business
In conclusion, globalisation as a whole has it positive and negative points. Not everyone is supportive of globalisation. There is a very strong argument that globalisation brings about the prospects of economic prosperity for countries that participate in the interdependent relationship. Countries such as China, India and Uganda have reduced their poverty levels through the embracement of globalisation. Therefore meaning that countries who fail to participate in the relationship would be deprived of the many benefits that could be obtained from globalisation. Various countries in Africa have failed to share in the benefits of globalisation. This could be due to many reasons such as corruption in the government or poor infrastructure. To end things on a positive note it can be said that as a whole globalisation has many benefits and does a good job in bringing people together.
BIBLIOGRAPHY
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Begg, D. &Ward, D. (2007) Economics for business. 2nd edn. United Kingdom: McGraw-Hill Education
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