Neoliberalism and Globalisation - Essay Example

Neoliberalism and Globalisation Name Institution Course Date Neoliberalism and Globalisation Its been more than 20 years that neoliberalism has been part of the global economy. The concept of neoliberalism argues that the flow of the economy should be sustained by the intensification and expansion of the market through minimal government intervention (Biebricher, 2015). Government should only be concerned with limited elements of the economy including security and extreme monopolies. The concept of neoliberalism has promised free global trade without stringent regulations and liberal movement in labour-force market (Biebricher, 2015). It has promised the ability of everyone to benefit from globalization. The realisation of globalisation has been possible through the concept of neoliberalism. It has accelerated the benefits of globalisation such as free trade, free exchange of technology, economic growth etc. Neoliberalism and globalisation have affected the most sensitive aspects of our lives but people have no idea of the effects or challenges they incur on daily activities (Guillen, 2001). This paper will discuss the statement, “As an economic and political program, neoliberalism promises that everyone will be able to gain from the benefits of globalisation but in practice there is clearly great disparity.” Neoliberalism has promised that people will enjoy the benefits of globalization (Biebricher, 2015). It claims that the government should not control the economic market and the flow of economy should be left to the market players through the movement of “invisible hand.” The concept of neoliberalism came after the great economic depression of the 1930s when the market was faced with extreme monopolies and the gap between the poor and the rich was widening very fast. According to Veitmeyer (2013), neoliberalism has amplified the effectiveness of the market economy. Policies based on the concept of neoliberalism often necessitate the reduction of the influences from the government which increases the power of the companies in the market (Bockman, 2012). Organizations with be actively be involved in the production of goods and services with an aim of increasing profits. With such arrangement in place, interactions between customers and companies can be invigorated while the effectiveness as well as the size of the market will be maximized (Bockman, 2012). With limited control from the government, the competitive power and innovativeness of organisations will also develop considerably (Bockman, 2012). One way neoliberalism has facilitates liberal flow of economy is in the case of Free Trade Agreement. FTA can be termed as a type of transaction that has led to the abolition of tariffs and other international restrictions linked to international trade between countries Guillen, 2001). Free Trade Agreement between the United States and Korea has illustrated the benefit that comes with neoliberalism. The two countries have offered better products in the markets with high competitive power since their trade agreement is based on lower tariff rates (Bockman, 2012). Neoliberalism has acted as the main power of globalisation. Globalisation has been accelerated due to the concept of “realization of neoliberalism” (Veitmeyer, 2013). Since, neoliberalism encourages free movement of goods and services between countries and facilitates the integrity of the market; the benefits of globalisation can be enjoyed without any restrictions. Globalization has affected the economic, political and social aspects of life (Dreher, Gaston and Martens, 2008). It has led to the elimination of global trade barriers which has promoted international exchange of commodities, technology and ideas which is beneficial in creating positive relationships between states. The increase in capital liquidity caused by globalisation has given investors an opportunity to invest in developing countries which has contributed to economic growth (Dreher, Gaston and Martens, 2008). Also, the flow of communication has been made possible through globalisation. With such possibility, global mass media have been able to connect the world together. They have enabled important information to be shared between companies and people found in different part of the world. Globalization has simplified the transportation of goods and people across different countries (Dreher, Gaston and Martens, 2008). In addition, globalisation has eradicated cultural barriers has impede positive relationships between countries and their people (Guillen, 2001). Globalisation has acted as a medium through which democratic ideals can be shared between developed countries greater independence can be experienced by developing nations. The eradication of cultural barriers has been made possible by the increase in global village effect brought about by globalisation (Dreher, Gaston and Martens, 2008). Globalisation has also reduced poverty in the developing countries as countries can share resources, commodities and ideas. It also increases the understanding of different cultures and beliefs and advocates for diversity which has been important in reducing war (Dreher, Gaston and Martens, 2008). Although neoliberalism has been linked to many benefits, it is considered the main cause of treacherous challenges today. According to Veltmeyer (2013), neoliberalism has led to the increase in the gap between the rich and the poor. According to research, only about 1% of the global population take up about 40% of the global finances while the rest 99% take 60%. Neoliberalism works towards increasing market efficiency through encouraging competition between people (Bockman, 2012). Such arrangement has worked towards expanding the gap between the poor and the rich. Neoliberalism has given power to the rich people who are becoming much richer while the poor are shrinking down due to economic hardship they experience in their lives. Neoliberalism not only affects people but also create hardship for companies (Dreher, Gaston and Martens, 2008). For instance, BMW Company was able to sell about 9250 car in Korea in 2011 while Subaru only sold about 240 cars. From this illustration, it is evident that market competition without governmental control increases economic gap in the market (Bockman, 2012). In addition, unemployment has increased over the last decade due to neoliberalism (Dreher, Gaston and Martens, 2008). The reality created by neoliberalism establishes that a person with minimal ability in the market is the target of unemployment while an individual with maximum ability is the target of good job opportunity. The concept of neoliberalism limits the involvement of the government in employment issues while cases depression among people suffering from unemployment (Biebricher, 2015). People are becoming befuddled by their infantilized dependency on neoliberalism and are unable to acknowledge the deceiving spectacles that prevent them from noticing the destructions caused by neoliberal agendas. Neoliberalism is linked to exploitation, wealth disparity, and society disintegration among growing population across the globe (Guillen, 2001). Therefore, although neoliberalism has promised the enjoyment of the benefits of globalisation, it cannot be deliberated as a positive status quo. The same way neoliberalism promotes the benefits of globalization, it also provokes destructions related to globalization (Dreher, Gaston and Martens, 2008). Although globalisation has contributed to economic growth in different ways, it has had negative effects in the world. According to Guillen (2001), globalisation has led to the destruction of national identities. Different cultures have different identities, culture and subcultures which symbolizes their way of life. The world has three main cultures; the United States, European Union and Japan. Globalisation has led to emerging countries such as China and Brazil to adapt to these cultural forces (Carolyn and Kolko, 2005). The U.S culture has a major influence on different countries which poses a threat to cultural identities. Also, globalization has reduced the environmental integrity across different countries as polluting companies from developed countries have taken advantage of countries with weak environmental regulatory rules (Dreher, Gaston and Martens, 2008). Globalization has caused unemployment of high skilled people from the developing countries. Many multinational companies seek to invest in a foreign market in order to have access to cheap labour which has decreased the chances of skilled employment (Carolyn and Kolko, 2005). This trend has increased the potential for economic disruption of developing countries. In addition, globalization has intensified competition in foreign markets. It has intensified foreign direct investments, international financial investment, and trade flow (Carolyn and Kolko, 2005). Although globalization has led to economic growth, many local companies are suffering from intense competition from large organisations. Large companies that previously operated in a controlled domestic market now face intense competition from other large organisations headquartered overseas. Therefore, the concept of neoliberalism has brought to reality both the benefits and the challenges associated with globalization (Dreher, Gaston and Martens, 2008). In conclusion, neoliberalism entails the reduction in government control over market economy. With limited government control, companies have the power over the market and competition shapes the condition of their operations. Globalisation is deeply linked to the realisation of neoliberalism. Since neoliberalism facilitates free international trade between countries, it has accelerated globalisation. Neoliberalism therefore intensifies the benefits and challenges of globalisation. It enhances fee flow of information and technology; it has brought countries together and has led to the growth of economies. In the same strength, neoliberalism has intensified the challenges that come with globalisation such as destruction of cultural identities, unemployment, intense competition and wealth disparity. If neoliberalism continues to reign in the market economy, the economy may be facing a future of social breakdown and instability. Nevertheless, people will continue to enjoy the benefits that come with globalisation. References Biebricher, T 2015, Neoliberalism and Democracy. Constellations, vol. 22, no. 2, pp.255-266. Bockman, J 2012, The political projects of neoliberalism. Social Anthropology, vol. 20, no. 3, pp. 310-317. Carolyn, W.Y and Kolko, B.E 2005, Resistance to globalization: language and internet diffusion patterns in Uzbekistan. New Review of Hypermedia and Multimedia, vol. 11, no. 2, pp. 205–20 Dreher, A., Gaston, N and Martens, P 2008, Measuring Globalization: Gauging its Consequences, New York, Springer. Guillén, M.F 2001, ‘Is globalization civilizing, destructive or feeble? A critique of five key debates in the social science literature. Annual Review of Sociology, vol. 27, pp. 235–60. Veltmeyer, H 2013, Development in an Era of Neoliberal Globalization, Hoboken,Taylor and Francis. Read More