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Globilization: At What Cost?

Essay by 24  •  December 28, 2010  •  641 Words (3 Pages)  •  544 Views

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"Globalization today is not working. It is not working for many of the world's poor. It is not working for much of the environment." (Stiglitz, 2002)

Globalization is a long-term historical process of world integration involving social, economic and political changes as a result of technological advances. As McLuhan (2001) says, "The concept is of one being connected by an electric nervous system within which the actions of one part will affect the whole". Globalization has the potential to benefit the world as a whole when the removal of barriers to free trade and a closer integration of national economies are successful. However, the mismanagement of the processes especially in the form of privatization has often created more problems. Most disturbingly this mismanagement has caused a serious deterioration of people's quality of life and increased the deterioration of the environment.

While the term globalization may be rather new, the concept is not. In the late 19th century, there was already an open global economy, with a great deal of trade, including trade in currencies (Castells, 2000). However the globalization of today's world is a much more revolutionary phenomenon. The modern revolution of globalization can be largely credited to changes in Information Technology, politics and policies, and the necessity of a global economy. The largest driving force behind globalization has been influenced by developments in systems of telecommunication, dating back only to the late 1960s, mainly Internet and electronic mail (Igbaria, 1999).

The World Trade Organization is one of the main institutions that have been governing globalization. The WTO emphasizes the importance of the free market policies of the Washington Consensus by showing that they have brought enormous benefits to global competition. These benefits come in the form of cost reductions in transportation and communication, the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders (Stiglitz, 2002) The 1990's was a pivotal time for globalization when some poorer countries enjoyed an average 5 percent growth rate in income per capita compared to 2 percent in rich countries. Moreover, people in these integrating countries now enjoy a longer life and a better schooling; in other words, their standard of living is far better than before (IMF, 2002).

Unfortunately not all the changes brought on by increasing globalization are good. Globalization has widened inequalities between the rich and poor even further. The increasing inequalities are evident in Africa and Latin America where most countries have lower incomes per capita than two decades ago (Castells, 2000). Yet, an even more serious issue facing world society is ecological and

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