The Future of Globalization - Term Paper Example

?Running head: Does Globalization Have a Future? Introduction Globalization has led to a rapid intensification of service trade and capital flows across the borders. It has been characterized by the movement of ideas, people and enhanced welfare, which has been achieved via efficiency gains. Nevertheless, higher growth and greater equity may have led to increase in income inequalities and the undermining of nation-states. Moreover, globalization has also been linked to underdevelopment, colonialism, and external shocks. The recent crisis in the United States’ housing market threatens to have a negative impact on the global economy (Weinstein, 2005). Globalization has the positive and negative influences and consequences. Its influences and consequences are spread across the globe. There is both optimism and concern in the future of globalization. The negative influences spread to other parts of the world and may continue to influence the society in future. In the light of this, it is important to assess the nature in which globalization processes will take course in the future. This paper highlights the future of globalization. Discussion Positive Impacts of Globalization in the Society in the Future Globalization may have facilitated market and trade integration in the recent past but there are speculations about its future. Globalization has brought implications for future mobility and migration, worldwide social inequality and technological expansion. Globalization is likely to play a huge role in determining competitive advantage in the near future. Given that previous advocates of globalization in the political and the business world of advanced countries are now in deep worry, it is apparent that globalization has brought positive and negative impacts. This worry stems from the fact that globalization has been responsible for the loss of jobs and pay reductions. Moreover, globalization has created a situation in which business executives continue to enjoy high salaries at the expense of other employees (Gangopadhyay & Chatterji, 2005). Given its numerous benefits, globalization will continue to play a vital role in converging market values and creating a free trading system. In the recent past, former socialist states have made transitions to economies that are based on the market. Countries like China have developed a capitalist economy with a hybrid system that possesses socialist characteristics. Such a development has had positive impacts on the economy with China witnessing an increase in productivity in some of its main industrial sectors (Waters, 2001). Globalization has influenced cultural preferences and taste in a scale that will be witnessed even in the future. Most countries are making a distinct move to homogenized arts, media and popular culture with the English language becoming the main lingua franca of communication in the global front. Moreover, the use of English as the main language has been promoted by the internet and the e-mail. Globalization has had negative and positive aspects. The positive aspects are many with globalization presenting numerous opportunities. Globalization continues to change the world system in an irrevocable manner and current trends indicate that the pace of globalization is bound to continue and accelerate in the near future. The most significant trends in the recent past and presently are greater inflow and outflow of goods and services, capital, people, money, technology, ideas and information (Rivoli, 2009). Globalization continues to lead to an increase in competition on the global front. This scenario will be witnessed in the future due to numerous beneficial aspects, which increase efficiency and production. Each country is likely to rely on globalization as a means of achieving higher production levels. Recently, increase in market space and competition has led to specialization and improvement in the division of labor. Countries that have thoroughly embraced globalization have achieved economies of scale and scope, which have brought constructive effects on prices and costs. Moreover, increase in globalization processes will ensure that the aforementioned economies of scale produce economic growth (Brown, 2008). Trade gains have also accrued as a result of an array of factors such as individuals, nations, trading blocs, firms and entire regions. The future of globalization will be characterized by gains for all involved parties with the potential of these parties witnessing an increase in production, higher wage levels, output, and living standards. Through these developments, human welfare and standards of living will be improved. Moreover, through the recent advocacy for free trade and economic liberalism will provide higher levels of material wealth. Over the recent past, economic liberals have argued that higher levels of economic and political freedom, which take the form of free trade, have produced positive changes in all aspects of development. Through liberty and capitalism, globalization will continue to influence the operations of major societies. Despite the existence of numerous problems in the wake of globalization, globalization will continue to remain as a positive force and a tool that will lift most countries from poverty. This will be achieved through the creation of an economic cycle, which results from an increase in economic growth. Furthermore, globalization creates comparative advantage, which is of major importance in the contemporary society (Gangopadhyay & Chatterji, 2005). Globalization is likely to lead to global democracy in the near future. According to Gangopadhyay & Chatterji (2005), the achievement of global democracy will enable world citizens to voice their opinions in political forums. Such a development will help individuals to bypass corporate oligopolies, nation-states, non-governmental organizations, and political cults. Through economic development and expansion, democratic globalization will be achieved and this will be followed by the emergence of political institutions in the global front. There is a likelihood of unification of nations under one government, which will reflect economic and political balances in the countries. Waters (2001) indicates that globalization is inevitable and there is a need for creation of institutions that exercise oversight on international bodies. An increase in interconnectedness through globalization will lead to improvements of sectors such as education. The globalized world will allow individuals from underprivileged backgrounds to rise from their disadvantageous positions and discover opportunities almost everywhere. Due to the establishment of corporations in disadvantaged countries as a result of globalization, individuals in these countries will be able to secure jobs, which amount to improvements in the standards of living (Weinstein, 2005). Negative Influence of Globalization in Our Society In The Future However, globalization can also lead to job loss in a country, through off-shoring. Globalization can be a threat to employment, besides providing opportunities. It results to internationalization of employment at the international level; therefore, jobs are lost, created, the working conditions in a country may be affected, income inequality arises, and poverty develop in a country. Like international investment and trade, off-shoring can have a positive influence on the developing countries by enhancing the market share and stimulating productivity gains (Auer, Besse, & Meda, 2005). Globalization negatively affected the economy of the developing countries in Eastern Europe. Elimination of trade barriers to enhance economic integration resulted in increased outflow of skilled human capital from the developing countries to more developed economies. Increased level of skilled human capital mass departure reduces the human capital base, thereby slowing down economic development. During the period of 1990s, when the developing countries in Eastern Europe had not embraced the policies to effectively operational globalization practices, the economic growth in these countries were slowed by migration of skilled personnel. The potential economic development in such countries was held back because of lack of skilled labor base. This effect has the potential of leading to increased wage pressures on the workforce remaining in the developing countries and increase inequality gap in those countries (Lowell & Findlay, 2001). Consequently, globalization has the capacity to influence negatively the society in future. Further, the consequences of global financial crisis, examined appropriately through understanding the financial globalization, which recently took place in the United States spilt over to other countries across the world because of cross boarder financial flows necessitated by the concept of globalization. The global financial crisis, the financial market stress of the United States, spilt over to other emerging and developed markets in form of loss of liquidity and hikes in interest rates because of financial globalization (Ernst & Escudero, 2008). The developments in global financial markets have considerable effects on the economic and social developments, adversely affecting income opportunities and growth in employment. This negative effect of globalization may influence the society negatively in future. Due to the global financial crisis, the developing countries were not able to improve their access to the international capital markets. The size of foreign credit to the emerging private firms declined. In addition, it led to the international freeze of the credit and considerable decline in stock prices internationally. The global financial crisis resulted in reduced demand for exports, eventually culminating in the collapse of international trade. Moreover, it hampered the growth and development of international capital markets, which presently has to depend on the pace of the economic recovery and the particulars of the revised financial regulation (Hale, 2011). The spilling effects of the negative consequences of globalization on the international markets demonstrate a worrying negative effect of globalization in future. The global financial crisis has influenced the imbalances that exist in the international economy. The crisis contributed to decline in technological innovations and international financial deregulations, which has slowed down the pace of globalization in the emerging markets and economies. However, in advanced economies, the financial conditions are more difficult than prior to the crisis, leading to reduced lending; therefore, international trade declines (Waller, 2010). The most obvious direct environmental effect of globalization is pollution, which is caused by transporting people and goods between trading countries across the world. Transportation majorly uses energy related fuel that emits carbon dioxide after combustion. International road, air and sea transport accounts for carbon dioxide transport related emissions. Globalization has led to an increasing volume of trade flows, implying more volumes of goods and passengers transported. Eventually, the environment is polluted from the use of faster and less environmentally friendly transport modes that emit more carbon dioxide (Ghemawat, 2010). The environmental damage caused by globalization in countries varies largely based on the transportation mode and the distance taken to transport the goods. Further, in the shipping industry, oil spills from the ships affects the water bodies and marine plants and animals that live therein. The introduction of the alien species and diseases in the local environment may at times endanger the local ecosystems (Ghemawat, 2010). Globalization has enhanced the idea of competitiveness, dividing employees both globally and domestically, and facilitating acquiescence to income redistribution, from wages to profits. Subsequently, globalization has contributed to reversing some of the gains that are made by the working class, including employment security, minimum wages and social security. As a result, it promotes unemployment, dislocates communities and depresses the wages of unskilled employees. It also aggravates the income inequalities within and across the countries (Bertho, Crawford, & Fogar, 2008). Moreover, globalization may influence the future negatively because it destroys the cultural identities, creating and accelerating victims of homogenized consumer culture as well as environmental problems. The rising sea levels besides the extreme weather conditions have a potential of displacing millions of people residing along the coastal areas. The pressures for change created by globalization are perceived as threats to the future of the society (Bertho, Crawford, & Fogar, 2008). Conclusion In summary, globalization has been characterized by movement of ideas, which has led to improvement in living standards. Globalization has led to efficiency gains, which has enhanced welfare. It will continue to play a huge role in creating comparative advantage, which is of major importance in the contemporary society. The future of globalization is negative because of the negative influence and consequences that it has. It may have a negative influence on the future economy of the world because it has contributed to increased poverty in some parts of the globe and is perceived that the same trend would continue in the future. Apart from undermining the environment, globalization has also undermined the stability of the global economy in some aspects. It dismantled cultural identification and all these negative effects spilled over to other parts of the globe. References Auer, P., Besse, G., & Meda, D. (2005). Offshoring And The Internationalization Of Employment: A Challenge For A Fair Globalization? Retrieved August 27, 2012, From Http://Www.Ilo.Org/Public/English/Bureau/Inst/Download/Annecy06.Pdf Bertho, M., Crawford, B., & Fogar, E. A. (Eds.). (2008). The Impact of Globalization on the United States: Culture and society, Volume 1. Westport, Connecticut: Praeger. Brown, G. W. (2008). Globalization is What We Make of It: Contemporary Globalization Theory and the Future Construction of Global Interconnection . Political Studies Review, 6(1), 42–53. Ernst, E., & Escudero, V. (2008). The Effects of Financial Globalization on Global Imbalances, employment and inequality . Retrieved August 27, 2012, from http://www.ilo.org/public/english/bureau/inst/publications/discussion/dp19108.pdf Gangopadhyay, P., & Chatterji, M. (2005). Economics of Globalisation. Farnham: Ashgate Publishing, Ltd. Ghemawat, P. (2010). World 3.0: Global Prosperity And How To Achieve It. Boston, MA: Harvard Business Press. Hale, G. (2011, January). Evidence on Financial Globalization and Crisi: Capital Raisings. Retrieved August 27, 2012, from http://www.frbsf.org/publications/economics/papers/2011/wp11-04bk.pdf Lowell, L. B. & Findlay, A., 2001. Migration Of Highly Skilled Persons From Developing Countries: Impact And Policy Responses, Geneva: International Labour Office. Rivoli, P. (2009). The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade. Hoboken: John Wiley & Sons. Waller, K. (2010, May 24 ). Globalisation and Global Financial Crises. Retrieved August 27, 2012, from http://www.apec.org.au/docs/RevSMECrisTalk.pdf Waters, M. (2001). Globalization. London: Routledge. Weinstein, M. M. (2005). Globalization: What's New. New York: Columbia University Press. Read More