“It has been said that arguing against Globalization is like arguing against the Laws of Gravity.”
Theoretically, globalization is believed to have a number of positive impacts across economies. Some of these positive effects include the creation of new jobs and skill-based work, exchange of currencies, ideas, cultures, technology, necessary assistance and what not. Thus, in the wake of the spirit of development and progress efforts were made in the direction of globalization which eventually did bring about results beyond the arena of theory. However, over the past few years, a slow retreat or attempts to retreat have been noted on the part of various countries with regard to this process.
Globalization as concept does not remain constant in its realization across space and time. Over the past four decades of the second phase of globalization, the first being in the period before the First World War, the degree of involvement of different countries has also varied. This variable involvement has led to fluctuations in the fluidity of movement of capital, goods and relatively less mobile labour. Consequently, we see that the product of this globalization has also differed from participant to participant.
Likewise, China and India have benefitted a lot more from globalization than other countries. This explains why, “in 2016, at $11.2 trillion, China’s GDP was second only to the US ($18.6 trillion) and at $2.3 trillion, India’s GDP was the seventh largest in the world, ahead of Italy ($1.9 trillion) and Canada ($1.5 trillion), and only slightly behind Britain ($2.6 trillion) and France ($2.5 trillion), though its per capita income continues to be a fraction of all four,” as reported by The Indian Express.
This variable distribution of the products of globalization has led to the development of different stances on the part of different countries in response to the process and results of globalization. One such stance and attitude is that of mild pessimism towards globalization as is evident from the action of certain countries. Trump’s opposition to multilateralism in trade and his concerns over the investment of American Corporations abroad, at the same time as Britain’s Brexit are a few manifestations of the growing pessimism towards globalization.
A lot of economic arguments about the problems of globalization have been advanced. One of the arguments is the one by Jagdish Bhagwati, who criticizes the instability of capital markets as against the relatively stable trade in goods. Another argument is that given by Dani Rodrick who emphasizes upon the fact that the losers of trade liberalization lose rather permanently [The Indian Express].
So is it on account of these scholarly arguments alone that the developed countries are now forming a slightly pessimistic outlook towards globalization? Well, the answer to this would be ‘No’.
A lot of political and social factors along with certain economic factors have a role to play in the changing political dynamics responding to globalization. A very important factor in this regard is the scope of state control which cannot exercise complete control over the expanding markets, which under the purview of globalization spread across several countries, especially in the case of labor markets.
Another factor is that of rising heterogeneity in the labor force due to immigration, which over the years even expands to political composition in most of the developed countries. This is exactly when the concepts of ethnic chauvinism, xenophobia, and exclusionary nationalism come into the picture and anti-immigration propaganda becomes successful. Such ideas claim to curb the issues of contracting opportunities for the so called national population.
Now the question is that, for any population, can a set of stricter immigrant laws guarantee more opportunities? In the short run, yes, but in all probability—not in the long run. A very important impact of globalization is the swift technical shift and the kind of shift that it demands even in the skill set. And this is not something that is limited to one country or the area of its origin. If certain technological changes occur in one part of the world they are bound to reach other areas sooner or later and the sooner your country gets in contact with such changes, the better position you assume in the competition of today’s global market. So, if you are able to safeguard the opportunities for your so-called national population from immigrants today, for example, that might help them avail those opportunities now. However, in the long run, even those opportunities will cease to exist in the sense that such a skill set might not be required because the technology might change to something which demands an absolutely different skill set. Hence, the more heterogonous a particular work force is, the better is its position to adhere to not only the technological changes but also to alternative economic pursuits.
Globalization has become an inseparable part of the economic dimensions of the modern world. So a mild retreat from globalization might be successful for some countries if they try but under no circumstances will it mean that these countries will ever lie outside the impact (direct or indirect) of globalization.
-Contributed by Richa Bhatt
Picture Credits: foreignaffairs.com