Globalisation as a Worldwide Economic Phenomenon

  • University of Toronto
  • Winter 2018: SOCD25H3 S Advanced Seminar in Economy, Politics, and Society Final Research Paper
  • Topic: Globalization as a worldwide economic phenomenon. Analyzing globalization from
  • economistic, cultural and structural perspective

1. Introduction

Globalization is considered a worldwide economic phenomenon. I will analyze this economic phenomenon from three perspectives: economistic, cultural and structural. Our world has become more interconnected and our relationship with one another is becoming closer. Compared with the past, we can now easily connect with each other using information technology. For instance: Using social media such as Whatsapp, Facebook, and Snapchat to keep in touch with our friends and relatives. These social media breaks the geographical constraints and enables us to stay connected with our friends anytime and anywhere. As a student, we can make use of the online platform to keep in touch with our professors and classmates so that we can receive important course-related materials and notifications from the university and discuss the subject matters through email or discussion board with our instructors and peers. From an economistic perspective, it becomes easier for firms and corporations as they can make use of the online platform to advertise and sell their goods and services. Since there are little restrictions on using the Internet, it enables us to obtain instant and first-hand information about what is happening around us. From a cultural perspective, we have similar tastes and preferences and consume the similar type of foods. Take Canada as an example, it is an immigrant country. It implies that we can eat a variety of foods from the different part of the world. People speak different languages, but we commonly use English to communicate with each other so that we can understand others easier. Meanwhile, while some people might think that globalization makes our world a better place, it poses some threats to us at the same time. For instance: Globalization will inevitably lead to the reduction of jobs that pay with high income, widens the income disparity between the rich and poor people and it will also create a phenomenon of cultural hegemony in which a local culture will be dominated by another powerful country like the United States. The structural perspective means the social networks that connect us with one another in the era of globalization. In this essay, I will take into account the three theoretical perspectives: economistic, structural and cultural perspective to analyze my chosen economic phenomenon and provide the best perspective that can be used to explain this phenomenon.

2. Description of the economic phenomenon: Globalization

The development of information and communication technology is prevalent in the era of globalization. Nowadays, people make good use of the Internet to exchange and share information with one another. They can easily upload and post some formal or informal information on the social media sites instantaneously so that other people can know what is happening around them within a short period of time. Globalization itself is a complicated process and almost every single country around the world experiences it. (Samimi & Jenatabali 2014: 1). Generally speaking, Globalization is interrelated to our daily life, and it affects us economically, culturally and structurally. Many countries especially those developing countries have concerns about the different effects brought by globalization such as how it will affect economic growth and development of a country, how globalization derives the problem of poverty and social inequality as well as cultural hegemony dominated by the super nation like the United States. (Samimi & Jenatabali 2014: 1)

3. Analysis of the economic phenomenon: an Economistic perspective of globalization

Economic globalization encourages foreign direct investment and stimulates the free flow of capital. I think when there is more the foreign direct investment, the better the economic development a country will attain. It will increase the real gross domestic product in the world and creates more new jobs in the developing countries because many large corporations will usually choose to outsource their non-core business activities to outside firms in the developing countries so that they can pay more attention and focus on their core business activities. My focus of economic perspective of globalization will be on the problem of how international trade creates more income inequality between the rich and the poor. Globalization on the one hand stimulates global economic growth but on the other hand creating more income inequality in the developing countries. (Atif et al. 2012: 12). In reality, different theoretical frameworks can explain the problem of rising income inequality driven by globalization. (Goldberg & Pavcnik 2007: 5). First of all, globalization implies that developing countries need to compete with other developed countries in the highly competitive goods and services market. Low-skilled workers in the developing countries mainly produce the goods that we consume nowadays such as the clothes we dress and the computers and smartphone we use. As a result, international trade not only stimulates global economic development but it hurts those workers in the developed countries at the same time. Those workers in the developed countries earn low wages mainly because their educational attainment is generally low and their work environment is usually poor. In other words, workers from the developed countries will earn more compared with their low-skilled counterpart workers from the developing countries. It will thereby increase the income inequality between workers in the developed and developing countries. At the same time, international trade will attract foreign direct investment as the developing countries are opening up their markets to other foreign investors so that they can invest in the country. Opening up the global financial market in developing countries will lead to the instability of financial market because of the volatility of short-term capital movement. (Lee 2014: 113). As a result, we often hear from the newspaper and radio broadcast that the income inequality is more serious during the period of global financial crisis.

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4. Drawbacks of economistic perspective on globalization

The possible drawback of economic globalization would be the exploitation of labors in the developing countries. Let me give an example of the exploitation of labor in production. We all know that Apple is one of the US-based leading electronics companies in the world. Nowadays, many of us are using their electronic devices such as iPhone, Ipad, and even Apple watch. It is obvious that Apple is a very successful company because its products are manufactured in different places around the world, mostly in the developing countries like China. Also, the brand recognition is high in the eyes of consumers around the globe. Unfortunately, the reality is that the Apple smartphone, watch and tablet that we are using right now are produced mainly in the developed countries such as China. I believe many of us have heard about the incident of Foxconn where Chinese workers worked in the sweatshop which primarily manufactured iPhone and Ipad for Apple Company and some workers ended up committed suicide because they felt very stressful at work. “Two Foxconn campuses in China witnessed a total of 14 worker suicides between 16 July 2009 and 22 August 2010.” (Guo et al. 2012: 486). The Foxconn incident is a typical case of a sweatshop in China depicting how a large corporation like Apple company exerts harsh work requirements on its workers to make sure that the production of electronic devices can be finished on time. It subsequently caused workers to commit suicide because they felt very stressful. From this example, we can see that Apple Computer takes advantage of its workers in China to meet their harsh demand. The labor cost in developing countries is usually cheaper so that many large firms will choose to hire the workers in these countries so that they can save their production cost.

5. Analysis of the economic phenomenon: Cultural Perspective of Globalization

As I have mentioned earlier, globalization means that our world is becoming more interconnected. It also implies that we as a consumer share similar tastes and preferences with other people. Many products we consume nowadays are becoming more homogenous. The Internet is a convenient platform for us to share and exchange information. For example: What happens in Canada will be instantly reported online by the news agency, and any breaking news will be uploaded online so that people in other areas of the world can know what happens very quickly. We tend to watch the same type of television programs on YouTube and listen to the same type of popular music as well as consume the same type of foods. Information Technology has transformed our local culture to global culture. For example, we now share the same habits with other people in other regions of the world. For instance: Social media spreads different societal norms and values and culture produces the Western style of living. Cultural globalization also promotes diversity and changes our tastes and preferences. Nowadays, global culture is an extension of American societal value. For example, many people around the world watch Hollywood movies and consume the fast food such as McDonald’s and KFC. Cultural globalization accelerates the integration of different cultures in the global system due to the advanced development transportation system and economic relationship between different countries. (Raikhan et al. 2014: 9) Take Canada as an example, many Canadian citizens come from different ethnic background and we respect other’s cultural background. We are able to taste a variety of gourmets within the country thanks to the influx of immigrants from different part of the world. They bring in their own food culture into Canada.

6. Drawbacks of cultural perspective on globalization

Cultural globalization will create a form of hegemonic culture which I have mentioned earlier: The domination of the US culture on the rest of the world. As we know that the Western style societal values substantially affect the global market and the way we think. One of the examples is the societal value of North American culture. In fact, many western countries like the United States and Canada embrace individualism. I believe that cultural hegemony will eventually erode local culture as many people from the non-Western culture will mimic what people do in the Western world. The local cultural uniqueness of their home countries will eventually be replaced by the cultural values in the Western World.. For instance, McDonald’s changes our perception towards fast food and the way we eat. In many Western countries like Canada and United States, many people like to eat fast food because they might think that eating fast food can save them a lot of time. American culture has a huge influence to other countries and my concern is that it might more or less erode the local culture.

7. Analysis of the economic phenomenon: Structural Perspective of Globalization

The structural perspective is one of the three theoretical frameworks in analyzing the economic phenomenon of globalization. “According to the structuralist view, globalization is taken for granted and seen as a manifestation of some deterministic logic.”(Morawaski 2010: 149). For the structural perspective, I will consider from the labor point of view to discuss the structure of globalization. From the labor perspective, globalization is raising the problem of labor inequality. In other words, the rich people continue to earn a lot of money while the poor people, usually the workers who do not possess much knowledge will ultimately suffer. From a structural perspective, globalization cannot adequately explain the problem of economic growth and distribution of income between the rich and the poor. No matter how hardworking those poor workers work, they still earn a little to support themselves and their families financially. Structural perspectives mean the social network that we have with other people. In the age of globalization, there are many rules and regulations governing the way we act. For example: Poverty is a very serious problem brought by globalization because it actually makes the rich people becoming even richer and those people especially those people working in the bottom layer of the society will usually suffer no matter how hard they work. Another example is the structural form of poverty in the society. Nowadays, many employers are exploiting their workers and they have to work very long hour in the office without receiving adequate compensation and work-related health insurance. When the workers earn little wages, they are unable to support themselves and their families, not to mention to have an ideal life after retirement. Thus, globalization actually poses a threat on workers especially those low-wage workers. They do not have much power to speak up and there are little rules and regulations to protect their rights.

8. Conclusion

In conclusion, globalization makes our world becoming more interconnected, and it enables us to share and exchange information using the advanced information and communication technology without little constraints. It is a worldwide economic phenomenon facing both the developed and developing countries. Meanwhile, globalization creates income disparity between the rich and poor people, the problem of cultural hegemony will emerge due to the dominance of Western culture especially the American culture is dominating the rest of the world. Overall speaking, I think the economistic perspective is the best among the three theoretical frameworks to explain the chosen economic phenomenon since there are ample of empirical evidence supporting the impact of globalization to economic development of our globalized world. Cultural perspective provides adequate empirical evidence and structural perspective provides the least empirical evidences as there are little examples to support the economic phenomenon.

9. Bibliography

  1. Samimi, Parisa and Hashem Salarzadeh Jenatabadi. 2014. “Globalization and Economic Growth:
  2. Empirical Evidence on the Role of Complementarities.” PLoS ONE 9(4).
  3. Atif, Syed Muhammad; Srivastav, Mudit; Sauytbekova, Moldir; Arachchige, Udeni Kathri. 2012: Globalization and Income Inequality: A Panel Data Analysis of 68 Countries: 1-14
  4. Goldberg, Pinelopi Koujianou, and Nina Pavcnik. 2007. “Distributional Effects of Globalization
  5. in Developing Countries.”:1-67
  6. Lee, Kan-Kook 2014. “Globalization, Income Inequality, and Poverty: Theory and Empirics”: Social Research (8): 109-134
  7. Guo, Lei, Shih-Hsien Hsu, Avery Holton, and Sun Ho Jeong. 2012. “A Case Study of the Foxconn Suicides.” International Communication Gazette 74(5):484–503.
  8. Raikhan, Sadykova, Myrzabekov Moldakhmet, Myrzabekova Ryskeldy, and Moldakhmetkyzy Alua. 2014. “The Interaction Of Globalization and Culture In The Modern World.” Procedia – Social and Behavioral Sciences 122:8-12.
  9. Morawski, Witold. 2010. Globalization In A Structuralist Perspective: Kozminski University, Warsaw:149-164
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