Elements & Phenomenon

Core Elements of Globalization

Basically, globalization rests on a tripod namely, the expansion of markets (economic), challenges to the state and institutions (political), and the rise of new social and political movements (cultural). Economically, technological changes and government deregulation have permitted the establishment of transnational network in production, trade, and finance creating what is referred to as a “borderless world.” The new production network describes firms and multinational enterprises (MNEs) who use advanced means of communications and new technologies to spread their activities across the globe.

The second element affects States. Political power and activities extend across the boundaries of nation- states while policy making on issues such as human rights, environmental degradation and nuclear safety have required global consensus. The third element of globalization affects more than markets and states. It is altering the lives of people across the globe. Fast dissemination of media, books, music, international ideas and values has produced a somewhat global culture.

Globalization Phenomenon Continues

Tom Friedman defines globalization as the dynamic integration of the world’s systems. Joseph Stiglitz, ex- World Bank Chief Economist and Clinton Administration advisor, terms it “the integration of the countries and peoples of the world … and the breaking down of artificial barriers to the flows of goods, services, capital, knowledge, and (to a lesser extent) people across borders.” Complementary to this, yet a bit more refined, is the explanation by Micklethwait and Wooldridge of The Economist, that globalization is based on freedom and is, “the freer movement of goods, services, ideas, and people around the world.” A recent United Nations panel on the impact of globalization “… confirmed that globalization was not just a phenomenon of the market place or financial transactions. It had also been spreading globally political paradigms, cultural patterns and social ideas. It has led to standardization of the world’s security systems. This way, globalization had been affecting the sovereignty of nation states and many of the established political, economic and social structures. Globalization is driven by both push-up and push-down trends.” Renato Ruggiero in his article, Next Steps in Strengthening the Global Trading System explains, ‘Globalization is not an option. It is a reality. Globalization is a high-speed train that is running very fast already. Anyone who believes that globalization can be stopped has to tell us how he would envisage stopping economic and technological progress. This is tantamount to trying to stop the rotation of the earth.’ Friedman in his book ‘Lexus and the olive tree’ compared globalization with a high-speed train, which cannot be slowed down to allow its intended passenger to board in. The only reason for this nonstop movement of the globalization train is because: it does not have anyone at its controls.

There are now two major points of view on the impact of globalization throughout the world. One talk in favor of the globalization while others opines against it. Those who favor globalization tend to use the macro analysis to support their arguments.