Globalisation and its advocacy by economists

The term Globalization is used to refer to ideas, knowledge, information, goods, and services moving from one part of the world to another. In an economic context globalisation is a term used to describe integrated economies marked by free trade, the free flow of capital among countries, and easy access to foreign resources, including labor markets, to maximize returns and benefit for the common good. The capital moved between two or more places, commodities were traded across borders, and people moved in search of better livelihoods to different parts of the world. The crucial element is the ‘worldwide interconnectedness’ that is created and sustained as a consequence of these constant flows.

There are three types of globalization viz. Economic, political, and cultural manifestation.

The economic globalization focuses on the integration of international financial markets and the harmonization of financial exchange. For example, India’s free trade agreement s with the EU, Australia, Sri Lanka, South Korea, Japan, Singapore, etc. Multinational corporations, which operate in two or more countries, play a large role in economic globalization. Besides, the G20, or Group of Twenty, is an international forum that aims to foster international cooperation by addressing global economic issues, such as financial stability and climate change. The G20 is made up of 19 countries and the European Union, including most of the world’s largest economies including India.

Political globalization refers to the national policies that bring countries together politically, economically, and culturally. International organizations such as NATO and the United Nations are part of the political globalization effort. At present, NATO has 32 member countries. These countries called NATO Allies, are sovereign states that come together through NATO to discuss political and security issues and make collective decisions by consensus. Besides NATO, Currently, 18 countries Argentina, Australia, Bahrain, Brazil, Colombia, Egypt, Israel, Japan, Jordan, Kuwait, Morocco, New Zealand, Pakistan, the Philippines, Qatar, South Korea, Thailand, and Tunisia are designated as US allies.

Cultural globalization focuses in large part on the technological and societal factors that are causing cultures to converge. These include increased ease of communication, the generality of social media, and access to faster and better transportation. Culture can manifest itself in several ways. Visible, but often indecipherable, are the behavioral regularities in the way people interact. Examples include the language used, customs and traditions practiced, and rituals employed in a wide variety of situations.

These three types of globalization influence one another. For example, liberalized national trade policies drive economic globalization. Political policies also affect cultural globalization, enabling people to communicate and move around the globe more freely. Economic globalization also affects cultural globalization through the import of goods and services that expose people to other cultures.

Benefits of globalization

Globalization enables countries to access less expensive natural resources and lower-cost labour. With less expensive natural resources and cheap labours, they can produce lower-cost goods that can be sold globally for maximizing returns. Globalization benefits both developed and developing countries.  Developed countries get access to lower-cost resources and cheap labor from less developed countries and less developed countries get foreign capital and technology they need for development. Foreign investment can result in an improved standard of living for the citizens of those nations. Thus, it changes the nature of international economic activity. The interaction that occurs among nations also promotes the cultural exchange of ideas. It removes the barriers caused by geographic constraints, political boundaries, and political economies.

Economists tend to be advocates of globalization and argue that the phenomenon has already brought about more choices for consumers; it has increased the inflow of foreign exchange and will further boost the economic growth of countries. They argue that the MNCs will provide more job opportunities and more opportunities for the local companies to collaborate with them and expand and grow.  Globalization extends the possibilities of specialization beyond national boundaries. There are also interactions between financial globalization and other policies. In particular, financial globalization binds the conduct of domestic fiscal policy and leads to greater consolidation, which also has distributional effects. The proponents of globalization view the increased ability to travel and experience new cultures as a positive part of globalization that can contribute to international cooperation and peace.

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