“Economic Globalization”
Economic Globalization
Introduction
Economic globalization has an obvious effect on the market economy. According to the laws of market economy, economic globalization is bound to coexist with opportunities and risks. There are different opinions on the essence of economic globalization. Analyzing from the perspective of social productivity, some people believe that the essence of economic globalization is market economics, that is, to realize the optimal allocation of resources on a global scale, and achieve "production under the most favorable conditions and sales in the most favorable market." This is the optimal state of world economic development. Therefore, the development of productive forces is the fundamental cause of economic globalization.
The essence of economic globalization
Analyzing from the perspective of social production relations, there is a view that as long as the capitalist economy is in a global dominance, the essence of economic globalization can only be the globalization of capitalist production relations. This argument is mainly based on the following reasons: 1. The global flow of commodities, currencies, capital, and technology, and the global production of multinational corporations, are all carried out in certain production relations. There is no pure material flow and material production separated from the production relations, so it is necessary to grasp the production relations between people behind the things and the international economic relations that are compatible with this. 2. The contemporary world is a world dominated by the capitalist economic system dominated by developed countries. The number of socialist countries is small, their economic strength is not strong enough, and their influence on international economic relations is very small. Therefore, the global economy basically operates in accordance with the laws of capitalist economy. 3. Monopoly capital in developed countries not only exploits their own working people, but also exploits the working people of other countries around the world. Injustice and inequality in international economic relations are indisputable facts. The unreasonable international economic order is one of the inherent contents of the globalization of the economy so far.
It should be admitted that the process of globalization of the world economy has just begun, and its impact on the economies of various countries and the entire world economy is still unpredictable, but one thing is very clear, that is, economic globalization is a “double-edged sword”. If measured purely from the perspective of human social progress and technological development, and from the standards of increasing productivity, economic globalization can promote the improvement of economic benefits and the expansion of the world’s industrial scale, which will cause changes in production and consumption from structure to location. Stimulate the research and development of various new technologies and so on. Similarly, economic globalization will also produce some negative effects, and the impact of these effects on specific countries and specific areas varies with the policy choices of each country.
Advantages of economic globalization
Here’s some advantages of economic globalization. Economic globalization can realize the optimal allocation of resources on a global scale. While economic globalization has effectively promoted international cooperation, it has also intensified competition among countries. The reason for competition is economically due to the limited resources of the world and the expansion of capital; politically, it is due to the existence of countries. All countries try to increase their own strength to realize the dependence of other countries on themselves. Earn profits more quickly and pay less cost. Economic globalization has accelerated the free flow of production factors on a global scale and formed a unified global market, thereby promoting the global operation of multinational companies and the adjustment of global industrial structure and maximizing the optimal allocation of resources. From the perspective of a country, domestic enterprises will break through the limitations of domestic resources and domestic markets and seek the optimal allocation and effective use of resources on a global scale. In addition, economic globalization has accelerated the process of technology transfer and industrial structure adjustment. Economic globalization has brought about the great development of the international division of labor, the great transfer of industries, and the great flow of production factors such as capital and technology. This will help developing countries make up for the gap in domestic capital, technology and other factors, give full play to late-comer advantages, and quickly realize industrial evolution., Technological progress, and system innovation are very beneficial to promote economic development. In the process of economic globalization, investment and technology transfer promote each other and continue to accelerate. In order to extend the life cycle of technology, expand the utility of technology and find a way out for their own technology, multinational companies have greatly accelerated the technology transfer activities. This kind of accelerated transfer is objectively beneficial to the technological development of developing countries, it is beneficial to the developing countries to accelerate the upgrading of industrial structure and the process of industrialization and accelerate the transformation from traditional economy to modern economy. In addition, the accelerated development of economic globalization has also accelerated the process of developing countries in attracting foreign capital from developed countries and helped to make up for the lack of capital in developing countries. Moreover, the development of economic globalization not only provides more opportunities for products from developing countries, especially labor-intensive products, to enter the world market, but also helps to make up for the lack of market development in developing countries, especially for multinational companies. Organizational forms are increasingly breaking through national boundaries, and so-called borderless enterprises have emerged, which is very helpful for developing countries to introduce advanced management experience from developed countries.
Economic globalization has increased the risk coefficient of economic fluctuations in various countries. Economic globalization has brought closer links between the economies of various countries and the world economy. The stability of the domestic economies of various countries will not only depend on their own domestic factors, but will be greatly affected by international factors to a greater extent. With the continuous expansion of international trade and service trade, the economic conditions of other countries, especially major trading partners, such as inflation and financial crises, will affect their own countries through the transmission mechanism of the international economy. If there are some similar hidden dangers in the country's economic structure, these economic fluctuations will inevitably occur in the country. Even if there are no problems in the domestic economy, the economy will fluctuate to a certain extent due to psychological factors. This is especially true for developing countries. Because economic globalization is the globalization of finance, trade, and investment. However, due to insufficient market development in developing countries, the economic structure is relatively fragile and more vulnerable to external adverse factors; and due to incomplete legislation in developing countries, it is convenient for speculation; In addition, the developing countries are not strict in law enforcement and do not abide by the law, which leaves an opportunity for "international hot money". As a result, a large amount of hot money from Western countries impacts the financial markets of developing countries from time to time, and even triggers financial crises, causing war-like destruction. Economic globalization has transmitted changes in the economic cycles, exchange rates, and interest rates of developed countries to developing countries, causing the economies of developing countries to often experience unfavorable fluctuations, which occurred during the Mexican financial crisis at the end of 1994 and the Southeast Asian financial crisis in 1997.
Economic globalization has widened the economic gap between countries. In the process of economic globalization, due to the imbalance in the level of development in the internal structure of the economies of all countries in the world, it is manifested in the level difference in the industrial structure. Judging from the current situation, there are inherent technological gaps in the industrial structure of developed industrial countries, newly industrialized countries, economic transition countries, and other developing countries. This gap makes it possible for developed countries to transfer technology only when the technology has reached its maturity stage. As a result, the gap in the level of economic development between developed and developing countries has further widened. Driven by the trend of economic globalization, the world market is leading the transfer of international industries. Due to the fact that the existing industrial level difference, it will inevitably further promote the unbalanced development of the world's economies. In particular, due to the trend of market interests, various economic entities are still mainly concerned with maximizing their own interests. This has caused some developed countries to transfer polluting industries, high-consumption industries and even gambling industries that are detrimental to social interests to the development of economic benefits. country. However, in order to pursue quantitative growth, developing countries are forced or unconsciously to accept this industrial transfer, resulting in a decline in the overall level of social development, and ultimately increasing the economic gap between developed and developing countries.
Negative effect on developing countries
Economic globalization has made developing countries pay a huge price. In the wave of economic globalization, developing countries are unable to compete with developed countries in terms of enterprise scale, efficiency, technological level, and research and development capabilities. As a result, the brands and products of multinational companies flood the domestic market, leading to the disappearance of national brands; The company manipulated and controlled the pillar industries and markets of many developing countries, inhibiting the independent development of national industries; developing countries introduced a large amount of foreign capital, which caused increased domestic inflationary pressure and faced exchange rate risks and debt repayment risks, which was very harmful to Western countries. Huge debt payments have become a serious obstacle to the economic development of many developing countries, often triggering economic and social turmoil; globalization will also lead to the brain drain of developing countries, especially skilled and high-level technical personnel. Multinational companies often hire readily available high salaries in host countries. The talents do not pay attention to the local implementation of training programs, thus causing developing countries to suffer the double loss of education expenditure and the inability to use the trained talents.
Benefit developed countries only
The operating rules of economic globalization are beneficial to developed countries. In the process of economic globalization, since international economic organizations are controlled by developed countries such as the United States, the rules of the game for economic globalization are mainly formulated by developed countries. Although some of the existing international economic rules take into account the interests of developing countries, such as the rules of the World Trade Organization, most of the rules are formulated by developed countries, and some rules are formulated in the absence of developing countries. . Certain industry development rules were formulated before developing countries developed the industry, such as information technology industry agreements and labor standards. Once developing countries develop these industries, they must abide by the rules they did not participate in and pay the price for this. In addition, although developed countries are vigorously advocating economic globalization and trade liberalization, governments of various countries still implement various trade barrier measures to protect their own interests. Especially non-tariff barrier measures, such as green barriers, technical barriers, etc., these trade standards deliberately formulated by developed countries are often difficult for developing countries to achieve. These measures objectively hinder the free flow of factors of production among countries, thereby restricting the market-oriented mechanism to a large extent, and the opportunities and benefits that developing countries deserve cannot be guaranteed. Therefore, the benefits of current economic globalization to the world economy are based on the loss of economic and political benefits of developing countries.
Reference
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