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Globalization - A Curse Or A Blessing?
Desh
The world has indeed become small! A kid in a village in Andhra Pradesh, India and another born in New York are tomorrow's potential competitors for a job or partners in a company that may bring forth the next big thing in technology after Google! The point is that the new economics and the paradigm shifts in business and education have created constituencies that can cooperate and compete in ways that were unthinkable just a decade ago!
Is Globalization New?
Globalization, or the movement and inter-linkages between populations in different countries to profit and benefit from arbitrage between the prices/cost of resources are not new. It is well known that extensive trade existed between Sumerians, Chinese, Persians and Indians. The very foundation of this resource movement lay in one set of people identifying external sources of improved techniques and systems or better products.
These movements and trade were not restricted to just commerce but eventually often ended up not only changing the habits, vegetation, and markets in the constituent countries, but also affected the socio-economic structure. Modern migrations for trade were undertaken with the explicit thought of extending one's sovereignty over a new geography. Columbus, for example, had a very deliberate goal when he left the shores of Central America after discovering the naive Native Americans.
When the East India Company entered India with the charter from the Queen (given on Jan 1, 1600), its main aim was to benefit in trade. However, as the political structure in India grew weaker over the next century, the land of India became a juicy target to rule.
This was also the time when science and technology was advancing in the West and the Industrial Revolution was about to begin. Faster and more effective ways to make fabrics and tools meant that the local artisans were no match for such technology. There was a clear arbitrage opportunity - cheap cotton grown in India and cheaper cloth made in England. If it could be sold at a monopolistic price, then the profit potential was astronomical! And that's where the British rule became an important cog in the entire trade equation.
Meanwhile other things were also happening - tea from China had been brought into India, spices from India had found their way to Europe, and new machines and a language were introduced on the ancient land hitherto unaware of these.
The trade was not just restricted between the trader and the market; it also had a tremendous impact on the suppliers. Indian farmers were being encouraged to grow opium which was introduced in China and when the rural and poor population become addicted, the prices could be set monopolistically!
The 20th century brought down the vestiges of colonization and empire (A direct consequence of arbitrage power run amok). However, the corporations, which were now private endeavors, realized that the multi-national appeal with monopolistic price setting was still the best way to make profit. Therefore, taking their products to places which did not either have the wherewithal to produce those products or where the quality standards had not reached the levels of the developed countries yet, was the best way to ensure relatively monopolistic prices.
So the driver of the global movement was the lure of arbitrage and the cherry on the pie came from the ability to set monopolistic prices.
Is Globalization entirely Evil?
Given that global arbitrage hunters have indulged in colonization, wars, and monopolies which necessitated brainwashing, killings, and crippling of the constituent populations, the question remains then - is Globalization essentially evil?
If studied closely, it is obvious that cross-pollinating of ideas and structures made the world more efficient and these improvements benefited even the victims of globalization.
In fact, there have been enough successes of globalization. These happened when anyone converted hitherto overlooked traits into telling strengths! The Japanese, from the 1970's through the 1990's achieved singularly the greatest turnaround in the fortunes of a society. The family values like pushing for higher virtues and performance were commonplace became strengths in corporations where the employees achieved newer heights by converting corporations into extended familial entities! The impersonal corporations were no match for the astounding increase in the quality of Japanese organizations. Success and "familial bonds" of these new organizations beckoned further success globally. Soon the tide had turned.
The Growth of Korean corporations has also followed the strengths of the Japanese companies.
Role of the Governments
From the state financing of Columbus to Korean Government help to its Chaebols, and more recently the backing of the Chinese Government to its companies in terms of political influence as well as finances, the "Hand of the Governments" of the day has been hidden but unmistakably present!
In fact, it can be argued that such a growth and influence on foreign markets is not possible without the backing of political policy and machinery. This is because in transnational trade a lot of trade and commercial barriers are involved which can only be influenced by Government to Government lobbying!
Globalization Alternatives
The countries which have allowed in transnational corporations have used two methods to gain benefits from their entry - Product/Services oriented liberalization or Technology transfer oriented liberalization.
Product/Services Oriented
Some countries let the companies bring in products while favoring the infrastructural companies to come and invest. As the country becomes a good market for foreign products, several other companies come in to improve infrastructural facilities as it becomes the next big commercial profit-making opportunity. Singapore falls into this category.
Technology Oriented
The technology oriented liberalization is used by countries which have a certain clout because of the buying power which the transnational companies want to exploit. Such countries aim to get the latest technologies transferred to domestic corporations, so the imports may be reduced and their own corporations can compete in the export markets.
India, in the past, and China very recently have been following this model.
Conclusion
So is globalization a good or a bad thing? Can it used to improve the standards of a society?
I believe that the answer is YES if the country knows how to use it in its own favor, and NO if the establishment is corrupt and will lose a major part of its sovereignty in return!
(Ongoing series of blogs on "Globalization")
Globalization - A Curse Or A Blessing?
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mayank
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February 1, 2006
07:19 AM
gr8 read. will be useful for my GD/PI
dkaps
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February 1, 2006
09:03 AM
thanks mayank! If you have any insights from your experience/study, please share here too!
thanks,
-d.
Rohan Venkat
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February 1, 2006
11:20 AM
Great article, although your conclusion, well, obviously it's a much more complicated than that.
YES if the country knows how to use it in its own favor
No doubt true, but what measure will be in its own favour is very debatable.
But then again, each case will be different and trying to analyse every situation would be impossible.
Good going...
dkaps
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February 1, 2006
04:51 PM
Rohan:
Good question!! I think in this debate on globalization, we have to remember that ultimately it is the freedom in commerce that the Government can advance to its domestic companies that helps a country in a long run!
In India's case of course, India's IT sector is not "because of" but "despite of" the Government!! Thank God the babus in India had no inkling of what was happening in this field for a loooong time!
Now they enter - and try and create the mess - watch Dewe Gowda .. or the reservations in the sector for lower castes etc.
Cheers,
Dkaps
mayank
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February 2, 2006
03:45 AM
you could readthis
mayank
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February 2, 2006
03:46 AM
i mean this
http://randomnessredefined.blogspot.com/2005/09/exporting-people-ever-since-childhood.html
dkaps
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February 2, 2006
09:18 AM
Mayank:
Nice blog post! And a great blog you have!!
Any comments on this post here - given your interest - on this subject? It would be interesting to read your take on globalization!
Thanks,
Dkaps.
Drishtikone.com
mayank
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February 2, 2006
11:58 AM
Dkaps:
Thank you, for the kind words, but i do not have the kind of indepth knowledge displayed by you. And as such, everybody has an opinion about globalisation.
indiacorporatewatch
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February 2, 2006
12:32 PM
Globalisation is inevitable
But I am totally against globalization
Not on the present terms that is being carried out
For more detailed analysis read
Fidel Castro's book of essays on Imperialist Globalization.
Shanti
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February 2, 2006
12:40 PM
ICW, how can you honestly recommend the words of a dictator who jails people for daring to say anything against him and rules over his underlings with impunity?
indiacorporatewatch
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February 2, 2006
01:02 PM
I recommed his readings based on my assessment of his stellar achievements(in no particular order) which are many but to mention a few that come to mind immediately include a world-class social health care system(which is free) and social development indicators superior to the US (Cuba's infant mortality rate, 6.0 per 1,000, is now lower than the U.S. infant mortality rate, at 7.2 per 1,000 ).Cuban doctors have probably saved more than a million lives in the last few decades by their selfless free service in different corners of the globe the most recent being in pakistan
I have great love and respect for the people of cuba
If not for the economic blockade and its negative effects along with the 24hrs/365 days of propoganda that is transmitted about Cuba,cuba today would have been considered the most progressive nation in the history of mankind.
Some of us do not fall so easily for the illusion's of freedom that many claim to enjoy in the west.
Some of us believe the individual should be subordinate to the collective society..
Some of us believe that moral and social incentives are far more powerful than economic incentives
I am one of those...
Shanti
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February 2, 2006
01:16 PM
ICW, let's again look at this point-by-point.
Cuba's mortality rate - Here is an interesting tidbit you missed - "Today, Cuba remains the most advanced country in the region in this measure, but its world ranking has fallen from 13th to 24th during the Castro era, according to UN Data. Also missing from the conventional analysis of Cuba's infant mortality rates is its staggering abortion rate -- 0.71 abortions per live birth in 1991, according to the latest UN data -- which, because of selective termination of "high-risk" pregnancies, yields lower numbers for infant mortality. "
Care to throw out more facts about the awesome "morality" of the awesome Cuba?
Let's not even get into the "illusions" of freedom shtick - let me know when you have actually lived in a comparable place and can genuinely tell if a place is free or not. You could also try telling this to the people who get onto any leaky floatable object they can get and try to come to the US by the hundreds. They just don't get how good they have it over there.
indiacorporatewatch
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February 2, 2006
02:15 PM
The abortion rates you have given are for 1991 so its relevance now can be questioned
Cuba's journey towards the pinnacle of human development has occured in zigs and zags
The increase in infant moratality is just a temporary blip before it resumes its progressive journey
There is no denying there has been great ecomomic discomforts in Cuba and a lot of suffering causing mass exoduses from cuba...
The main reason for suffering being the economic blockade led by America ....
They want to do an Iraq in cuba...
But the bad times are behind us with the whole of Latin America poised to take a left turn cuba could do with some support and we will mostly see a revival that would cement cuba's place as the most progressive nation in the history of mankind.
The mere fact that the worlds largest terrorist organisation the CIA has time and again tried to assasinate Fidel Castro is enough reason for any socialist to extend his unconditional support to cuba.
dkaps
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February 2, 2006
02:29 PM
ICW:
Whenever I have read economic history, I have been amazed at the societies who did well (means materially prosperous) were the ones which had "Open" systems. Its not a fluke that Nalanda is till date the ONLY International University we had EVER!
One of the reasons why Indian kingdoms failed to meet the challenge of the Brits was - we had stopped benchmarking ourselves against the West .. which had taken giant steps in the renaissance era. Had we been more global in our mindset, we would have seen it coming.
So, globalized mindset is an important ingredient to even stay alive.. leave alone prosper!
I have seen the incredible romance that Gandhi's "self reliant village" brought in many anti-global folks.. .but honestly, if that was a "standard" world wide.. places like Dubai, Singapore and Japan would have been just pieces of land with nothing there!!
As far as Castro and Cuba is concerned, I think freedom of speech and thought is a very important ingredient in development too. Which is kinda missing in there. As far as "development indicators" in leftist societies are concerned..even Mao made a virtue out of upwards of 20 million deaths!
So, despite the fact that I share my birthdate with Mr. Castro and astrologically might behave as he does had I been atthe helm.. but at least as of now.. while I live as a mere mortal.. I cannot see much good out of his Government. :-)
Cheers,
Desh
Drishtikone.com
Shanti
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February 2, 2006
03:04 PM
ICW, as the link I provided explains, UN has data ranging only till 1991 and we don't have nay other data to compare things with. Of course, you will have low infant mortality rate if you aborting all those who might not survive infancy. You can look at why people get into leaky boat-wannabes to escape to America and in that process face death or you can take someone like Castro at face value.
Aaman
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February 17, 2006
07:56 AM
This post has been chosen as a Desicritics Editors' Pick - thanks for writing it.
keta meera sahebu
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December 10, 2007
01:57 AM
Globalization has good points and bad points. Each country therefore has to examine it from its own angle and decisions have to be taken.
For example if one country is short of say some fax machines and if one can get them at low prices then it may be of help to that country to get these machines.
But say that country itself is making fax machines but at high prices , and the industry is struggling to survive global competetion, it is at that time , if you import fax machines then the local industry may die. Under these conditions importing fax machines even though they are low cost at that time may be a death nell for its own industry. If that industry dies because of this import policy at that time then from a long term point of view it is not good to import those fax machines.
These are the issues each country has to examine before it embraces the policy of globalization
keta meera sahebu
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