Economic, Cultural and Political Impact of Globalisation

In this rapid changing world, globalisation affected people and states around the world largely. A British Labour Party politician, Clare Short, once said: “People have accused me of being in favour of globalisation. This is equivalent to accusing me of being in favour of the sun rising in the morning. (Ridgers, 2012)” This quote shows quite well that globalisation is the new ages of human history, which is inevitable. Most of the people think that globalisation is the process of interconnection between the people, companies, governments of different nations, in which driven by massively increased trade and cultural exchange (Navar, 2003). However, it may be too simplistic. Globalisation, in fact, has many underlying meanings and brings some unforeseeable consequences. Therefore, this essay will attempt to analyse globalisation and find out its true definition. In order to demonstrate this, this essay will discuss the meaning of globalisation in three dimensions: economy, culture and politics along with three waves of globalisation, namely hyperglobalist, sceptics, and transformationalists.

Globalisation in economy dimension refers to the worldwide movement of the global economy, resulting in the increased interconnectedness of national economies with free transfer of goods, capital, and services across national borders (Guttal, 2007). Financial markets, such as credit markets, commodity markets and capital markets are the apparent examples. Base on the hyperglobalists’ perspectives, there are four main factors that lead to the process of globalisation in the economy (Martell, 2007). Firstly, transportation advances. With the improvements in transport, a large number of people and goods are able to move more quickly (Guttal, 2007). As a result, the cost of transporting goods becomes relatively cheaper where there are many larger cargo ships available (Guttal, 2007). Also, it means that the cost per item can be reduced since the cost of transporting is the key reason which influences it (Guttal, 2007). Secondly, the freedom of trade. The typical example of it goes to the Europe Union’s (EU) free movement and trade, which includes goods, workers, and services (Nayar, 2003). This promotes people in different European countries to open or do business in each other’s countries (Nayar, 2003). Thirdly, technology revolution. It offers a more accessible and convenient communication between people around the world with the birth of electronic communication devices, such as smartphones, email, faxes, and social networking websites or apps (Nayar, 2003). Lastly, labour availability and skills (Guttals,2007). It could tackle the problems of jobs and skills shortage in More Economically Developed Countries (MEDs) and reduce the unemployment risk in Less Economically Developed Countries (LEDs) in the meantime (Guttals, 2007). Moreover, it can take advantage of cheaper labour costs (Guttals, 2007). For example, Indian people whose country with the high unemployment rate are employed in Germany with lesser wages to fill the IT vacancies there (Campe, 2008). Since it seems that the process of globalisation is not inevitable due to the reasons above, then it may be appropriate to look at what impact will it make.

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Hyperglobalists say that capitalism is one of the many manifestations of globalisation (Guttal, 2007). As we know it today, capitalism is an economic system in which a country’s industry and trade are owned privately by people with minimal interference from the government (Campe, 2008). In this case, hyperglobalists claim that the growth of capitalism results from the rising interconnectivity between countries (Martell, 2007). They think that when the world becomes more integrated, the economies are becoming “denationalised” in which the relevance and authority of nation-state are declining (Martell, 2007). Also, they view the transnational corporation (TNCs); the companies that operate in different countries, becoming the biggest global influence and not nations, for example, Coca-Cola and MacDonald (Campe, 2008). Consequently, the global economy is considered to have integrated, accepted and included different parts of the world (Guttal, 2007). Hyperglobalists claim that global economy brings some advantages. Firstly, global economy promotes the increasing international trade and the rise of the number of TNCs in which helps countries, especially LEDs by training the local people with new skills and jobs (Manu, 2000). Secondly, improvement in the standard of living that provide a better living condition for people living in countries that are globalising (Manu, 2000). For example, countries who welcome those foreign investments could earn more revenue as globalisation has brought about more opportunities for trade (Manu, 2000). The Singaporean government used this revenue to develop sectors, including welfare, transportation, and education.

In contrast, sceptics’ perspectives consider global capitalism as a myth (Martell, 2007). They believe that the nation-states still have the responsibilities to control the flows of economic benefits even though the number of TNCs is increasing (Martell, 2007). For example, foreign investment flows into the control of several advanced economics (Martell, 2007). This shows that TNCs are still relevant to their original nation-states and gain profits for these states (Martell, 2007). They also look global economy negatively. They state that global economy is essentially not globally inclusive for two reasons; rising protectionism and increasing international inequality (Liedekerke, 2000). In economics, protectionism represents a method to restrain trade in goods and services (Liedekerke, 2000). Sceptics claim that the increased competition among nations is the main reason of causing protectionism (Teichmann, 2002). For example, the lower costs of labour in China and India make many companies have located their production facilities there (Teichmann, 2002). Benefiting from the increased revenue, these countries can rapidly develop their infrastructure like road networks and industrial parks, which further improve their attractiveness to foreign investors (Teichmann, 2002). Consequently, this strongly threatens developed economies such as Thailand and Singapore and more so for LEDs with poor political stability and infrastructure like Cambodia and East Timor (Manu, 2000). According to World Health Organisation (WHO), “Economists predict that increased competition from low-wage countries will destroy jobs in richer nations and there will be a ‘race to the bottom’ as countries reduce wages, taxes, welfare and environmental controls so as to be more competitive, at enormous social cost. Pressure to compete will erode the ability of governments to set their own economic policies and the move towards deregulation will reduce their power to protect and promote the interests of their people. (Liedekerke, 2000)” When the protectionism leads to the higher international inequality, the income gap between countries is widening (Nayar, 2003). For instance, business owners in developed countries are able to outsource their operations to other countries in lower costs of production due to the improved communications and transportation (Nayar, 2003). As a result, higher retrenchment rates become higher, and income among the average workers reduce, turning into a phenomenon that the rich getting rich and the poor becoming poorer (Nayar, 2003). During 2012, the 29 richest states on earth generated 48 percent of the world output, whereas the 51 poorest nations contribute only 2 percent of the world’s total output (Manu, 2000).

While the globalisation makes a huge change to business dealings, it also has cultural implications. Culturally globalisation refers to an interconnection of ideas, customs and values around the world (Guttal, 2007). In hyperglobalist perspectives, globalisation leads to the homogenisation of the world under American popular culture or Western consumerism (Martell, 2007). It states that globally people are enjoying the homogenised global cultures as the culture consumed is no longer exclusively from their own nation (Guttal, 2007). The national culture is declining significantly as people are interconnected with a universal culture (Guttal, 2007). For example, globalised culture shown in different areas, such as music, television, and sport. Firstly, music from certain countries has spread and sold across the world, notably the Beatles in the 1950s (Campe, 2008). People could learn the English language, English love stories, and ultimately culture through their lyrics (Campe, 2008). Secondly, Hollywood shows on television which originally produced for local audiences has been widely known in the world through globalisation. Consequently, the American culture, customs, performance, folk tales which appear in the Hollywood shows dominate global culture (Campe, 2008). Lastly, football’s popularity shows the globalised culture in sport. People with different nationalities would royally support the football teams. Also, it is common that there are many football players in a team are of different nationalities. Moreover, football is included in Olympic Games. In this case, hyperglobalists say that the emergence of the new technologies is the key role in promoting the global culture, particularly Internet and Satellite communication (Campe, 2008). People all over the world could receive the news, messages or information instantly from these corporations.

However, sceptics view the global culture differently that it is, in fact, Western ‘Imperialism’ (Teichmann, 2002). They criticise that globalisation poses a threat to classical nationalism where Western cultures dominate over all others (Teichmann, 2002). They also condemn that globalisation inevitably leads to the clashes of culture as the speed of globalisation has been accelerated significantly by the improvement of technology (Guttal, 2007). The noteworthy example can be found in migration. In the United States, the ‘melting pot’, which refers to the assimilation of migrants into one single culture, has been happening (Campe, 2008). Another example can be found in Hollywood films, in which poses a powerful influence in the global film industry (Campe, 2008). It is found that 95 percent of the global movies are produced by the USA whereas, on the African continent, only 42 films are produced each year. On the other hand, transformationalists argue that globalisation refers to the intermingling of cultures and people (Guttal, 2007). It is said that cultures are hybridised and transformed into new forms (Teichmann, 2002).

Politically globalisation means the expansion of the worldwide political system (Koshy, 2001). In the hyperglobalist opinion, political globalisation challenges the nationalism, which leads to the decline of national-state and the loss of national sovereignty (Koshy, 2001). International organisations including the World Trade Organisation (WTO) and the European Union (EU) superseded the nation-states to take the lead in decision-making (Haynes, 2003). Many states’ sovereignty is weakened when the membership in intergovernmental organisation asks them to hand over (Agnew, 2009). For example, German students in Scotland unexpectedly are allowed to vote in elections to the Scottish Parliament. However, sceptics propose political globalisation in various ways, again. They say that states retain autonomy and sovereignty unevenly (Agnew, 2009). Some states have gained, and some have lost political power, for example, many states become stronger with more social democratic policies. They also suggest that there is a great power inequality between the states (Liedekerke, 2000). The most powerful nations would use those international political body as a tool to impose their will for their own benefit and to exempt themselves from restrictions when it is disadvantageous to them (Koshy, 2001). Oppositely, some weak nations, perhaps, have no freedom to speak their will in front of these most powerful nations. In contrast to another two views, transformationalists see political globalisation in a relatively positive way (Haynes, 2003). They think there is a shared sovereignty between nation states and international organisations (Haynes, 2003). Nation states still have the power to make important decisions. States and international political body cooperate with each other to solve the global problems, such as demands for human right, environmental pollution, developments in international transport and communication (Haynes, 2003).

In conclusion, this essay has attempted to demonstrate the meaning of globalisation in economic, cultural, and political dimensions. In these dimensions, it is not hard to see that technology revolution in recent years has played a vital role in the growth of globalisation. Moreover, with three perspectives on globalisation, it is likely to conclude that there are various meanings of globalisation in different dimensions and it is neither the totally positive nor negative. Globalisation helps as well as harms the world relations. Therefore, it is better to raise public awareness of globalisation, so that people could take it carefully to avoid the worst consequences.

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