Globalisation: Friend or Foe?

by Rzvan-Victor Sassu

Globalisation is a complex, multi-faceted process, widely spoken about, but often poorly understood. When assessing the impact and effects of globalisation, people usually tend to address only very limited aspects relating to this process and fail to look at the big picture. Thus many of them are led to adopt a radical position, either opposing it very strongly or expressing deep support for it. However, when talking about globalization one must try to analyze it thoroughly and think holistically about both its advantages and disadvantages, while also acknowledging that, for all its problems, globalisation is to a great extent an irreversible process. Once this is fully grasped, governments and world leaders can shift to a more productive approach and channel their energies into finding global solutions that consolidate the benefits of globalisation and avoid or reduce its problems. First of all, we must take into consideration the complex dimensions of globalization, at a cultural, economical, political and social level. Each of these is strongly influenced by the process of globalization, both on a positive and negative point of view. Although globalisation is not a new concept at all, as it existed since prehistoric times (Manfred, 2009, p. Chapter 2), the process started intensifying at a faster than ever rate in the 1990's. This was facilitated by new and improved technologies, mainly used for communication, manufacturing and transport. Thanks to the fast development of communication technology (of which the Internet and recent high-speed connections are the most important) people all around the globe are more connected than ever. If an aviation accident takes place in Rio de Janeiro, for example, the information travels in just a few minutes on the whole globe. People from every corner of the world can afterward donate for the victims with the help of online banking and payment tools, or at least emphatise with the Brasilian people. This example easily illustrates the very definition of globalisation, in the views of Anthony Giddens, professor at the London School of Economics, who refers to globalization as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occuring many miles away and vice versa. (Manfred, 2009, p. Chapter 1) The process described above has a more profound impact at the level of social interaction. The speed at which information travels around the globe also contributes to the strenghtening and dissemination of democracy and free trade. When speaking of democracy, the Arab Spring recent events of 2011 can be a very good example. (The Economist, 2011) Also, a more recent example is the KONY 2012 short movie that 1 Author: Razvan-Victor Sassu

became viral on the Internet at the beginning of 2012, which helped millions worldwide find about a local terrorist in Africa. (Smith, 2012) The movie determined people all around the globe to take action and raise further awareness of the problem, across the borders. Another benefit of globalization can be considered from a cultural point of view. More and more people across the globe listen to the same music, watch the same movies and share the same passions. Countries with strong cultures, such as the United States or China, can now propagate it much easier to other parts of the world. (Manfred, 2009, p. Chapter 5) Communication, democracy, culture and global awareness of local happenings also have very important economic consequences. Globalization is usually linked with free trade and financial freedom, and also with deregulation. Free trade on a global scale can have important benefits, as shown by the evolution of world trade in the 1947-2005 period, from $57 billion to $12.6 trillion. Although the collapse of the Bretton Woods Conference brought worldwide instability and several crisis, in the long-term the global economy managed to get back to growth, as seen by the above example. (Manfred, 2009, p. Chapter 3) So far we have seen some of the key benefits of globalization, but that is just one side of the coin. Globalization also brings a set of very important problems and concerns, which should be analyzed closely. On a cultural level, globalization becomes a threat to local and national customs and traditions, as nations with strong cultures penetrate more easily those more localoriented. This process is also facilitated by transnational corporations, headquartered mainly in countries like USA, UK, France, Germany, Japan, which of course help propagate their home-country culture across borders. (Grazia, 2011) As seen above, globalization fosters free trade across the globe, which besides its benefits, also brings several critical problems. Because of deregulation, intensive financial engineering, financial speculation far beyond the real economy, all these encouraged by globalization, the global economy collapsed in the crisis that started in 2008-2009. Moreover, instability continues to be present on a global scale and solutions are hard to come by (see, for example, the Euro crisis and the case of Greece). Speaking of instability and crisis, because of globalization, nowadays every nation on the globe is affected in one way or another by the problems of other states. The promotion of free trade and deregulation also severely enlarged the gap between rich and poor nations, thus bringing with itself greater inequality. Developing countries usually have to suffer from increased free trade, contradicting Samuelson`s theory. Those nations see the largest income distribution inequality, as seen in Latin America, 2 Author: Razvan-Victor Sassu

with large Gini indexes, where the top 10% of the population live a luxury-life, while the bottom 40% are living in significant poverty. (Palma, 2011) Most of these problems can, however, be reduced in intensity by governments worldwide, if there is sufficient will and empathy. One of the solutions can be more regulation on a global scale, especially for the financial sector. However, regulation should offer the legal framework and fundamentals for the functioning of the global economy, simmilar to Bretton Woods, without severely restricting or punishing real economy transactions, that create jobs and output. Thus, regulation can help avoid future crisis and pave the way for stability and prosperity, while also narrowing inequality. Tackling the cultural problems of globalisation, I think that a good practices model can be the European Union, with its motto Unity in diversity, where national traditions, customs, products are treated equally and with utmost importance. Indeed, transnational corporations are still causing cultural problems in the EU, the solution being, in my opinion, national regulation on the matter, for protecting the national culture. However, to avoid excesses and over-regulation that would force corporations to leave the country, I would recommend a United Nations agreement/resolution as a general framework, in a democratic style. In conclusion, we should accept globalization as a process that is getting stronger and stronger, with the help of new technologies, with a profound impact on a cultural, political, economical and social level and as such, we must take into consideration both its positive and negative aspects, so we can avoid the latter and consolidate on the former.

3 Author: Razvan-Victor Sassu

Bibliography
Grazia, I.-G. (2011). The role of transnational corporations in the globalisation process. In J. Michie, The Handbook of Globalisation, Second Edition (pp. 173-184). Cheltenham: Edward Elgar Publishing. Kitson, M., & Michie, J. (2000). The Political Economy of Competitiveness. London: Routledge. Manfred, S. B. (2009). Globalization: A Very Short Introduction (Kindle Edition) (2nd ed.). New York: Oxford University Press. Michie, J. (2011). The Handbook of Globalisation, Second Edition (2nd ed.). Cheltenham: Edward Elgar Publishing. Palma, J. G. (2011). National inequality in the era of globalisation: What do recent data tell us? In J. Michie (Ed.), The Handbook of Globalisation, Second Edition (pp. 135-170). Cheltenham: Edward Elgar Publishing. Smith, D. (2012, March 16). Kony 2012 puts child soldiers back under the spotlight. The Guardian. Retrieved March 17, 2012, from http://www.guardian.co.uk/globaldevelopment/2012/mar/16/kony-2012-child-soldiers-spotlight?intcmp=239 The Economist. (2011, December 10). Islamists, elections and the Arab spring. The Economist. Retrieved March 9, 2012, from http://www.economist.com/node/21541404

4 Author: Razvan-Victor Sassu