Globalization | Consequences | Chapter 6 | Class 12 | Political Science |
Concept of Globalization
The word Globalization has been in use for the last more than 25 years. The credit for coining it goes to Harvard Professor Theodre Levitt. By Globalization we mean ‘Free flow of goods, services, peoples, ideas, capital and cultures across national borders’.
There are thus these kinds of flows from one place to another
1. Free flow of goods between various countries.
2. Free flow of Services and persons between nations.
3. Free flow of Capital between nation-states, the entrepreneurs of any country may invest their capital in any of the other countries.
4. Enabling ideas and cultures to become global.
• Since technology and management have become global, the managers or skilled craftsmen can avail the benefits of foreign markets without any restrictions
• Globalization ensures ‘Worldwide Interconnectedness’.
• It is also a multidimensional idea, it has many dimensions-economic, political and cultural.
• The consequences of Globalization are very uneven, at places it has boomed the economic activities and at others , it has perished them.
Negative Consequences of Globalization
1. Retail Shopkeeper’s Fears – Retail Shopkeepers are afraid that soon the retail business could also become monopoly of some multinational companies and they would lose their livelihood.
2. Farmers Committing Suicide – farmers could not proper remuneration for their produce, although they had bought costly seeds, provided by Multinational Company (MNC).
3. Acquisition of land –Acquiring land for industrial purposes has sharpened the debate on land acquisition. Several state governments in our country acquired agricultural and forest lands for developing Special Economic Zones.
4. Plagiarism– with this interconnectedness the film industries all around are taking inspirations from other films, in this process a film maker may take the concept of one film without giving due credit to the former.
5. People worried about threats of modernity to their indigenous culture– with Globalization , western clothes are getting widespread popularity which may not be liked by the conservatives.
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Causes of Globalization
1. Historical factors– globalization is not a recent phenomena, although the scale at which it is happening now is huge then it used to happen back in days, but it has its roots way back in history.
2. Technology and Communication Revolution– during the last three decades dramatic changes took place in the field of technology. Cheap telephone, email facilities, computers , aircrafts flying at supersonic speed and huge vessels have come up, these developments have pulled down all barriers to the movement of goods, people, capital., raw materials machines and manufactured goods could now reach every corner of the world within no time.
When the state leaders, educationists, journalists, and media men travel from one country to another , they carry along with them beliefs, values and traditions of their respective countries.
3. Policy of Economic Liberalization and Privatization– one country after another opened its borders to trade and foreign investment. This gave impetus to Globalization of markets and production.
4. Interconnectedness between states and people– Globalization is also being driven by the fact that peoples or states were all interconnected.
Political Consequences of Globalization
1. Reduction in State’s Welfare– The ‘Welfare State’ is now getting converted to ‘Minimalist State’. The government of present time is withdrawing from welfare activities and just performing the work of Police state where the government just looks after law and order. Advent of MNC’s all around has caused reduction in the power of state.
2. Effect of Globalization on State Sovereignty – states continued to be ‘Primacy Actors’ in international Politics. Despite globalization , there has not been much decline in state’s role in international politics. States are not prepared to accept third-party intervention for settling their bilateral disputes. The state still renders important services to its citizens and it’s still very important.
3. Globalization has increased State’s Capabilities– state’s capabilities as a military power have improved to a large extent . One of the reasons for ,making them powerful is the improved technology that has added to the destructive power of weapons at their disposal. Secondly, the states have now better access to information. The ‘Information-rich’ states may govern better than their earlier counterparts.
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Economic Consequences of Globalization
1. Free flow of goods and Services– Globalization greatly facilitated the movement of goods, services and capital across national border, this movement may either be voluntarily done or may be forced by international institutions. The restrictions, tariff barriers have now been reduced to a great extent.
2. Role of World Bank , IMF and other Financial Institutions – World Bank, IMF, WTO are the three main institutions which work for the implementation of the policy of globalization. These institutions are being used by the developed countries and MNC’s to implement the policies which suit their economic interests. They forced the developing countries to open their markets to MNC’s on the ground that this would be a great boost to their economy.
3. It has also led to flow of ideas across national boundaries. The best example would be spread of Computer and IT sector.
4. Free flow of capital– The investors now have access to global capital markets.
5. Free movement of Persons – For thousands of persons Globalization has been an important mechanism to upgrade their skills and have access to global markets. But the developed nations have not shown much interest in accepting people from developing countries. They are afraid that they will snatch away their jobs.
Criticism of Economic Globalization
Globalization has linked markets and peoples and enhanced the choices before them. But it has had many negative consequences-
• Economic Disparity– it has led to the increase in the economic divide between the haves and haves not.
• Increased Misery due to the state withdrawal from the Welfare activities– poverty eradication efforts have been adversely affected. The poor needed the ‘Social Safety Nets’ ( state subsidies on education, health and housing to the poor people to cover up the ill effects or negative effects of Globalization ). But people around the world also argue that Social Safety Nets are not sufficient and hence the need to stop Globalization altogether.
• Dangers of free trade for the poor and Developing Nations– Globalization favours the major developed countries such as USA or Japan and rich population of the world.
• Neo-Colonialism– Globalization leads to neo-colonialism or economic control over poorer nations. Economic policies of underdeveloped countries are being framed in accordance with the directions of World Bank, MNC’s and WTO.
• Anti-Globalization Movements– opponents of Globalization have been increasing massive protests and demonstrations against financial institutions.
Advantages of Economic Globalization
1. Economic Development and Prosperity – the benefit of globalization is that it leads to economic growth of the nations and the world.
2. Improvement in living standards of the people– de-regulation gives more variety to the customers to chose from and hence contributing to their lifestyle.
3. Globalization has led to Increased Interconnectedness among peoples and Nations– the resources and managerial skills of various countries could be pooled to benefit the whole world.
4. It is no longer possible to reverse the Process of Globalization– whatever may be the drawbacks of globalization, it is inevitable and an irreversible process. And hence the best option would be to check and control its negative effects.
1. There is also a cultural dimension of Globalization.
2. Cultural Homogenization – Globalization poses a threat to the cultural diversity of the world and creates cultural uniformity throughout the world which is called Cultural Homogenization.
3. Cultural Homogenization will lead to imposition of Western Culture on the world.
4. There’s a popularity of American Culture and it is because of her dominant role in world politics. From McDonalds to Jeans we find American customs being practiced everywhere in the world.
5. Accusations are often made that culture and languages of poor nations could be swallowed by the Western World in the near future.
6. Fast foods, Fashion shows, Beauty Contests and Fashion Modelling threaten to weaken the cultural fabric of Afro-Asian societies.
1. Culture and Language are not static or changeless things- Cultures do succumb to external influence and make significant change in itself and it’s bound to change at on some point of time.
2. Culture Heterogenization – Globalization has resulted in ‘Cultural Pluralism’ which went against the tendency towards cultural domination. Cultural heterogeneity is expanding instead of having shrunk in degree. Jeans culture expanded, but at the same time the demand for Indian Kurtas and Khadi wears in USA and Other countries and fusion of Indian wear and Western wear is becoming more famous.
India and Globalization
1. British Rule– Under the British rule, India became an ‘agricultural colony’ of the British . the manufacturers in England required raw materials for their industries. India emerged as a producer of these export crops.
2. Post-Independence – After independence steps were taken to promote industries. To help our own producers and to save them from foreign competition, we adopted the policy of ‘PROTECTIONISM’ . The Industrial Policy Resolution, 1956 gave the Public Sector a strategic role in the economy. But the economy did not grow much during this period.
3. New Economic Policy- In 1991 the government NEPM to tide over financial crisis. The key features of the new policy were-
• To start the process of transferring state-owned enterprises to the private sector.
• Linking Indian economy to global market.
4. Globalization has increased competition in Indian market, has opened access to new technology and new markets, has increased access to international financial markets and increased efficiency of banking and finance sectors of India.
5. On the other hand it has also had an adverse impact on India; the workers are exploited by the private enterprises, due to withdrawal of subsidized health services, cuts in education expenses and other welfare measures the poor people are getting affected, it has also created income inequalities.
Resistance to Globalization
Arguments against Globalization
1. Privatization has widened economic disparities. The Special Economic Zones are named as Special Exploitation Zones, because of the sufferings it inflicts on the people.
2. The living condition of people was becoming more and more difficult due to the withdrawal of the State from the Welfare Activities.
3. On one hand, technology has led to an increase in production, but it also resulted in income inequalities and the miseries of unemployment.
4. It posed a threat to the political and economic sovereignty of the weaker nations.
5. Another threat emerging out of this New Order is that Western culture would degrade the Afro-Asian Society, its ideas, customs, education and age-old traditions.
6. The Rightists supported, ‘’protectionist measures’’ to help domestic industry by putting heavy tax on imported goods.
1. In 1999, the WTO Seattle Meet ended without achieving much because of protests and demonstrations. There were allegations of ‘unfair trading practices’ on international financial organization, because of which the gap between the developed and the developing countries had increased all the more.
2. The developed countries sought to link environmental issues with trade.
3. The Canun (Mexico) round of negotiations in 2003 ended in failure.
4. The Geneva Meet in 2006 also failed to evolve a consensus about tariffs or duties on the import trade of the farm produce.
The World Social Forum– Opponents of Globalization formed this platform to give vent to their anger. It was a broad coalition of workers, environmentalists , farmers, women and human rights activists. They were united in their dissatisfaction with economic globalization. Their first meeting was held at Port Alegre, Brazil in 2001.
Developing nations are being forced to open their markets to agricultural and industrial goods of the developed countries. This would affect their domestic industries and the livelihood of farmers and craftsmen who constituted around 80% of the population of the developing countries.
India’ s Resistance to Globalization
In India, both the left-wing and the right-wing are united in their protests against economic liberalization and policies of MNCs.
1. They have raised their voice through various platforms, one such being, Indian Social Forum against the gap between rich and poor.
2. Many trade unions and farmers’ outfit have organized protests against MNC’s for adversely affecting their livelihood.
3. It has resulted in cuts in State expenditure on education and health services and other welfare measures.
4. The Leftists objected that American and European firms had been trying to obtain a patent for Neem and Haldi to extract natural resources from these plants.
1. The international Financial Organization posed a threat to our status as a sovereign nation.
2. The developed nations refused to reduce subsidies to their farmers. India wants that developing countries to be allowed to provide higher subsidies to their farmers beyond a limit of four years from now on.
3. Cultural Degradation- foreign T.V. channels, western-style dresses, promotion of Valentine’s Day and growing Western tastes among Indian girls and boys are regarded as a threat to India’s cultural and moral values.
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