Positive and Negative Effects of Globalization Essay

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Positive and Negative Effects of Globalization

The unique process of globalization is transforming the world in a phenomenal way. The world has never seen the movement of people from one place to another on such a scale as at present (Nevin, 2006, p. 43). Another major facet of current economic globalization is increasing libertarian concept of free trade across the world. Obviously, it goes against the proponents of protectionism and socialism. The concept of free trade is flourishing since the early nineteenth century when Adam Smith and David Ricardo emphasized about the principles and advantages of free trade (Went, 2002, p. 16).

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Adam Smith successfully defended the profits of social distribution and free trade across the national borders. The theory of comparative cost and comparative advantages was further supported by David Ricardo. He suggested the advantages of globalization by taking the example of England and Portugal as: "England may be so circumstanced, that to produce the cloth may require the labor of 100 men for one year; and if she attempted to make the wine, it might require the labor of 120 men for the same time. England would therefore find it her interest to import wine, and to purchase it by the exportation of cloth. To produce the wine in Portugal, might require only the labor of 80 men for one year, and to produce the cloth in the same country, might require the labor of 90 men for the same time. It would therefore be advantageous for her to export wine in exchange for cloth. This exchange might even take place, notwithstanding that the commodity imported by Portugal could be produced there with less labor than in England. Though she could make the cloth with the labor of 90 men, she would import it from a country where it required the labor of 100 men to produce it, because it would be advantageous to her rather to employ her capital in the production of wine, for which she would obtain more cloth from England, than she could produce by diverting a portion of her capital from the cultivation of vines to the manufacture of cloth" (Ricardo, 1821, pp: 140-141).

Essay on Positive and Negative Effects of Globalization Assignment

Although globalization certainly helps in the exact manner as Adam Smith and David Ricardo explained, yet they missed out certain drawbacks related with the enigmatic phenomenon of globalization. The basic argument against the advantages of globalization is the assumptions made by the free-trade supporters which are far stretched away from reality. "Free trade supporters assumes that all income in a country is expended to buy goods; that there is never any reduction of demand because money is saved; that full use is being made of productive capacity and of the factors of production, which adapt instantly to changes in demand; that countries always have or are headed rapidly towards a balance of trade; and that markets adapt quickly and are therefore perfectly flexible." (Went, 2002, p. 73). Many economists, including Frey and Weck-Hannemann expressed the inflexibility and imperfection of globalization and free market theory that has been underlined by the assumptions made by free-market theory proponents is the main cause of why people support protectionism and calls against globalization (Went, 2002, p. 73).

Globalization does not only hold its importance in economical circles. Globalization has its own cultural effects too. Cross cultural contacts grows at rapid rate due to globalization that promotes advent of new ideologies and levels of consciousness. Globalism includes cultural diffusion and transformation of culture. People in different parts of the world can easily fulfill their desire to enjoy and consume the exotic products and services along with ideas of lifestyles. Globalization provides a media to spread new technologies and practices throughout the world. All these diffusion lead to a world culture, announcing whole world as a single nation, a unique abode for human beings of all races and ethnicity. Globalization reduces the issues of racism and similar discriminations. "It brings human beings together." Yet there are some negative effects of cultural globalization too (Pieterse, 2003, p. 11).

Because of globalization and the need to adopt a single means of conversation, different parts of the world suffer the loss or reduction of importance of native languages and that leads to loss of ideas too. Furthermore, many scholars believe that the consequences of globalization may not really be a homogenization of culture. They suggest that negative effects of globalization may reach towards cultural crumbling, the conception of hybridized cultures, the recrudescence of formerly declining cultures,… [END OF PREVIEW] . . . READ MORE

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