Consequences of Globalization

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Globalization can be expressed as the rise in integration of the economies of the world making them more interdependent. This has been through the removal of international trade barriers that used to limit the movement of people, information, goods and services through the rapid development of innovation and the resultant technological progress.

The term globalization has become even more common since the 1980s when it was believed to symbolize technological advancement which in turn led to the faster and efficient modes of communication that we see today. However, in recent times, it has become even more difficult to define as it bends all the conventional rules that were known before. It is now a frequent discussion in board rooms, journals, political conventions among many other forums.

This paper seeks to explore the concept of globalization, based on the journal by Fareed Zakaria. It explores globalization from an American point of view and explains its effects to the American economy. It deeply questions American economic policies which seem to be ignoring the reality that is globalization. It also observes that American policy makers have their priorities mixed up, investing in military muscle while the rest of the world has moved on after the cold war to invest in economic muscle.

Though globalization has many proponents who view it as a key to the world’s economic development and wealth creation, it also has had its fair share of critics.

While globalization might be seen by some people as the source of universal peace and global economic prosperity, its critics have been fast to expose its dark sides such as its assertions that it enriches the worlds rich while further impoverishing the world’s poor.

This is evidenced by the increased exploitation of the smaller or weaker economies by the global giants and their multinationals. The opening up of global markets has brought unfair competition to the poor countries.

According to Zakaria, (Para 4) though the United States is ranked the world’s most competitive economy as per the world economic forum, this fact may soon be gone. He describes this as the decline of the previously evident influence of American companies to the rest of the world.

Traditionally recognized economic giants are slowly being overtaken by some of the previously shunned upon economies like India, China, and Brazil. The American people know this as different opinion polls have evidenced. However, the government is still hell bent to sell the same old story that the real problem is in insecurity as terrorism has been rife.

As an effect of globalization, however, the resulting explosion of information to and advancement in technology, has only served to make this fallacy stronger. We live in a world where even the smallest case of violence in the most remote of places in the world becomes ‘breaking news’ all over the world.

The information revolution has served to further boost the effects of globalization with rapid growth in the information technology sector. The people know what the real problem is as fears of disruptive forces such as recessions and the resulting unemployment and foreclosures loom. This has been as a result of American big businesses that were previously the global giants loose to more emerging markets.

America cannot be considered a superpower any more as everything that was big about America is no longer the case. We are losing from all fronts and while the people may be seeing this, successive governments are still reluctant to accept what is openly evident. According to Zakaria, America is fast loosing time as relevant stakeholders capable of salvaging the situation are busy debating.

One side is saying that we should woo the world back while another claims that we are paying the inevitable price of power as these fast developing countries are labeled envious. What they do not realize is that while we are fixated on this idea the word has moved from the previous anti-Americanism to post-Americanism.

What Zacharia doesn’t realize is that the threat of terrorism is more directed towards the U.S. as Islamic extremists have declared war on the U.S.

Today, America lives in what he describes as a unipolar world where the country concentrates on military and political power. However, other countries are now concentrating on financial, industrial, and social cultural integration. Zacharia says that as Americans are describing this shift of economic powers as the decline of their country, others see it as the rise of everyone.

This has been happening progressively for the past 20 or so years and has been precipitated by the international climate where prosperity and the unprecedented peace are rife, positive characteristics of globalization. However, he does not recognize the fact that Americans have also advanced and are not where they were 20 yeas ago.

War, civil strife and terrorism may cause temporary shake ups, but they are eventually overwhelmed by the effects of globalization. However, it is not correct for Zakaria to brand the US a war monger since the war in the Middle East is not only American as other countries like Britain and Australia also have their armies there.

He says that the world is experiencing enormous vitality as a result of globalization as there is more of what he calls ‘sensible economics’. For example, the hyperinflation that was there 20 years ago in many world economies is now manageable through successful monetary and fiscal policies.

This has served to reduce the worlds’ poor from a previous 40% to 18% by 2004 and this is further expected to drop to about 12% by 2015. The effect of globalization is also seen where more countries are contributing to the global economy what Zakaria describes as the sharing of the ‘global economic pie’.

One of the disadvantages that Zakaria expresses about globalization is that it has led to some of the problems experienced in the world today. Due to economic liberalization, it has led to people holding too much money and this, coupled with low inflation, has led to low interest rates, which has further led to a consumerism culture.

This is witnessed in the emergence of numerous economic bubbles, and an all-time high in the prices of food and oil. With more money, demand for almost everything has surpassed supply, hence pushing prices up. This has been more disadvantageous to the world’s poor who now have to match the greed of the rich. There are however, other underlying issues that raise the cost of living apart from the consumerism culture for example over dependency on oil as a source of energy.

The biggest effect of globalization, as he expresses, is probably the emergence of new economic powerhouses that are a deviation to the traditional characteristics.

While great economies were considered those with low populations, compared to their GDP, countries such as China, India and Brazil have now broken these ranks. What he doesn’t realize is that per capita income in these countries is still low since they have large poor communities as compared to the U.S.

He also recognizes that globalization has led to an increase in nationalism as strengthening economies are earning their people recognition and respect the world over. He gives an example where growing up in India in the past, people were fascinated with America and American billionaires.

However, this has changed as there is an emergent of even richer and flashier billionaires in India that ordinary Indians can identify with. Zakaria doesn’t realize that this doesn’t mean the decline of American billionaires since they are still there and growing in numbers. It only means that India has started having its own billionaires.

Though critics may describe the current predicaments of the United States as ‘globalization hitting back at them” America as a whole has benefited enormously from globalization as it has witnessed increased growth, low inflation and low unemployment. American companies have also expanded to new economies, thus emphasizing their stability.

The country has also benefited from the expertise of the many engineers and other professionals that come from other countries to train in America. In his conclusion, he suggests that America should stop fighting the rest of the world and join it in the process of social and political integration. However, he doesn’t realize that the U.S. joined the world as we are educating the world’s best, hence, indirectly fueling globalization.

Work Cited

Zakaria, Fareed. The Rise of the Rest. The Economist. 2008. Print.

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Consequences of Globalization

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