Globalization is a very up-to-date and highly debated topic, since economists have realized that the human society has really changed since the beginning of globalization. However, this observation is not new. Human society has always practiced international exchanges with trade routes like the Silk Road in Asia. Marco Polo is one of the forerunners of this trend. This open topic means different things to different people, and it is very hard to give a real definition. We may only say that globalization is very close to the ideas of a global village, single world society, and modernization. The world is becoming interdependent, and interconnected with respect to economy, as boundaries do not exist anymore.
To explain globalization we will first see what the different theories which appeared through centuries from mercantilism to International investment are. Then we will identify the link between the origins and the benefits. There are several benefits, but globalization also has limits which we cannot ignore.
[...] However there are several factors which can embody the origins of globalization Macro-level of analysis Trade liberalization appeared in the 1950s', just after the deregulation of the economy. Governments have gradually accepted foreign investment, and consequently companies were able to trade worldwide since the 70s', and mostly in the 90s'. For example, in a study from UNCTAD (2000) about the world investment, the number of countries that introduced changes in their investment regimes increased from 35 in 1991 to 63 in 1999. [...]
[...] We can say that globalization enabled the appearance of new products in different countries. The exchanges of goods and products were a way for all the countries to create a sort of global culture of consumption. At this stage, we cannot deny the fact that globalization has been profitable to nearly all countries, because the economic opening has brought prosperity and wealth for a lot of regions in the world, like for example, Taipei, and Thailand which are among the first twenty exporters and importers in world merchandise, or South American countries such as Venezuela and Argentina. [...]
[...] Globalization has generated inequalities, not only on an international scale, but also on a national scale. Actually, the main problem today is the problem of unskilled workers. There are a lot of migrations of highly skilled workers in rich countries, and that gives rise to the problem of “brain drain” that developing countries are facing, in order to increase economic growth. It is very hard for a poor country to develop itself if there are no skilled people to drive the economy. [...]
[...] appeared in the eighteenth and nineteenth century Classical Trade Theory This conception of globalization leans on the theories advanced by Adams Smith and David Ricardo, namely: Absolute Advantage, and Comparative Advantage. The Theory of Absolute Advantage (1776) is opposed to mercantilism, and wealth is not based on gold. Adams Smith considered a rich country as one whose citizens were able to enjoy good incomes levels. He was opposed to mercantilism since it seemed to create winning and losing nations. A gain for one nation means a loss for another. [...]
[...] Several authors and researchers have argued that globalization has brought lots of benefits. Hill and Mahoney showed that globalization has generated an increase in trade and in capital flows, so that it created economic growth and millions of jobs in a majority of the countries in the whole world, especially in low-income countries. Globalization enabled a big raise in the consumers' incomes, as well as in the quality of their material life. The opening of the market is the total opposite of autarchy, or else the maintenance of barriers and frontiers. [...]
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