GLOBALIZATION

Globalization

Globalization

Introduction

Globalization is the term used to report the condition that prevails when communication, people, goods, services, and capital move more freely across borders. Often globalization is the result of technological improvement that facilitates communication and transport and economic liberalization that gives people the freedom to make use of them. It is the most important international phenomenon of the early 21st century, touching all aspects of life, politics, and business.

Libertarians have historically in the past promoted globalization because of its liberating effects on people's lives. Globalization is an international extension of free markets and open societies. In effect, it is capitalism borderless. In closed societies, people are limited to what is developed locally; they buy locally made products from a local supplier, they work for local employers, and they must borrow funds from the local bank. Globalization permits us to interact with whomever they pick, and to buy from, to work for, or to borrow from others than the local employers and suppliers. These greater horizons permit people the freedom to look for options and the dignity to set their own terms for cooperating with others.

Globalization also increases material progress. When consumers can pick options, domestic businesses are exposed to competition from the world's most efficient options, which force them to look for ways to make their products and services better and cheaper. It also means that each business and nation can specialise in producing what it does best, importing other goods from countries where they are more cheaply produced, thus increasing total world production. The corollaries to this material progress are that ideas and technologies are basically transferred across borders and capital is free to move to the places with the most promising ideas and innovations.

Globalization is important for poor countries. In an open world, they can employ technical and business solutions that took richer countries generations and billions of dollars to create, they can attract investment from richer nations, and they can sell goods in wealthier markets. This ability to leapfrog whole stages of industrial development explains why countries with open economies ruled by the rule of law have grown faster as wealth in the remainder of the world has increased. From 1780, it took England 60 years to double its national income. However, Sweden could accomplish the same feat in the 40 years following 1880, 100 years later. Yet another 100 years later, it took Taiwan and South Korea 10 years to do the same.

One can make a reasonable argument that classical liberalism as a political movement was born in the campaign free trade in the 19th century, which the liberals saw as a way of promoting international peace, individual freedom, and material progress. In the mid-19th century, liberalism could consolidate the whole of Europe in to a free trade area, marked by freedom of movement for capital, goods, and people. Liberalism's success in this area accelerated the Industrial Revolution and caused an economic convergence among European nations. This first period of globalization was not completed inasmuch as the ...