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Economics: Defining Globalisation Pt1

By Edited Apr 27, 2015 0 0

I aim to discuss the meaning and conceptualization behind globalisation and
my view of the concept and how that stands in modern economics. Then in my
own view, determine if globalisation is of relatively new origin or not. To
then look upon factors that were present in a proposed 'beginning' of
globalisation, the nineteenth century, and discuss how these features
compare with current view of globalisation.

We could start by saying that globalisation is the continuing process of
greater interdependence among nations and that of their citizens, but in
truth I could also be correct to say that 'it is the integration of
economic, political and cultural systems across the world' or that it is
the 'Americanization of world culture'. In defining globalisation, the
difficulty lies in the varying answers to the question 'what does
globalisation mean?'. The answers only really reflect what it means to the
individual, hence in my opinion resulting in a not very useful concept,
analytically due to the lack of trends that can be made. 
For example trade is a action that can be analysed, it has particular effects on particular
countries, and different effects on others. There is no generalisation to
be made about the effects of trade on countries, where one country, trade
effects it one way, migration a different way, and again with capital
flows. Then to solidify, the immigration of unskilled workers entering a
country will have a singular effect on the income distribution of a wealthy
country, where a lot of unskilled labourers entered, there can be the
assumption of that this will have a negative effect for native unskilled
workers. That of immigration of skilled workers into the same economy,
there will be a completely different effect, hence the broadening out even
further makes it a almost useless concept within modern economics more a
convenient 'shorthand'.

Then how can we date such a broad concept, it has to depend on the given
definition of the term. For example if it is thought of as in the way of
trade, and the affects that these had on income distribution, then it is
arguable that only since the nineteenth century could the process occur
(Kevin O'Rouke). The reason behind this is due to transport costs being so
high, lowering of the cost resulted in an increase in the trade of
commodities such as grain, iron and steel between nations. From the
nineteenth century onwards it could be said that a worker in one country
could be affected by the trading policy of another. So globalisation in
that sense can be pin pointed at the nineteenth century. In contrast Adam
Smith argues that 1492 ( Christopher Columbus discovers the Americas) and
1498 ( Vasco da Gama makes an end-run around Africa and snatches monopoly
rents away from Arab spice traders) were the 'the two most important events
in recorded history' (Tracy 1990) and that this was ' a genuinely global
epoch of world history' (Bentley 1996). Which was the belief of trade, as
in the previous point, but that simply because it was 'long distance'
trade, it became significant hence constituting a form of globalisation,
others would argue that Smith was perhaps relying on a over-broad
definition of the term of globalisation such as James Tracy. 
Other economists believed that globalisation occurs even further back, the like
of Andre Gunder Frank who argued that a form of globalisation was taking
place from a trade link between Sumer and the Indus Valley Civilization
over five thousand years ago.
Please continue to Part 2.
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