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Economics: Defining Globalisation Pt3

By Edited Sep 20, 2016 0 0

Continued from Part 2...
The aspect behind capital flows shows "Europe was the world's banker"(Feis
1930), areas with access to capital and mass resources would prosper during
the 19th century. Europe were at the helm of integration with the world
dominating foreign investment, where assets by countries held in foreign
countries accounted for 7% of the world GDP in 1870 (Obstfield and Taylor).
Evidence to suggest the increase of FDI and hence capital flows, was the
reduction in government state bonds where in Europe it fell on average by
5% in just 1870, showing that investors thought FDI to be rather the safe
at the time. (The Cambridge Economic History of Europe Volume II C1).

The feature of migration where in the 1840's free immigration (non-slave)
to Americas was around 178,530 per year (Chiswick and Hatton 2003) and
close to a million by the end of the 19th century. Within 1880's Europe the
gross decadal emigration rate per thousand was 141.7 in Ireland, where in
1810 in Italy it was recorded at 107.7 already. Returning migration varied
over counties a significant amount came back to the likes of Italy, but
little for the Irish. The causes, the New world and it's higher land ratio,
meaning increased wages, British real wages in 1870 were 60% less than
wages of the New World, hence resulting in huge gains for migration, along
with new transportation technology it became inevitable.

Globalisation today is far broader, now the emergence of worldwide
production in industry and access to a greater range of foreign products,
international trade has increased incredibly over 100 fold (Globalisation
Shakes the World, BBC news 2007). A greater financial involvement with
increased external borrowing, more than one and a half trillion dollars is
traded daily just through currency exchange. A realisation of a economic
global market, based on the freedom of exchange of goods and capital, the
interconnectedness of these markets, could result in a negative or positive
domino effect, resulting in competitiveness to be massive, calling for
constantly improving efficiency and productivity.

The aspect amongst information, there is a continuing increase in the flow
of information between one country to another, this has been vastly
accelerated compared to that of the 19th century which extraordinary
inventions such as the internet, telephone and satellites etc. Then in
regards to information, the ability of languages has passed over boarders
hugely, where English and mandarin are the most popular languages in the

For me however will be the cultural factor behind globalisation is a huge
feature that has changed incredibly compared to the nineteenth century,
that I believe is what defines it differently for people of today, and
explaining why they believe the term of globalisation is 'new'. The growth
of identity awareness and hence resulting in the spread of cultural
diversity, people have now greater understanding of the ways that they can
improve their quality of life, such as by enjoying foreign products, ideas
and to adopt their ideas and practices in the participation of "world
culture" (Nadeem, S 2009 Macaulay's (Cyber) Children). The idea behind a
monoculture in which there are no distinctions and everyone just shifts
between various lifestyles. Caused by the greater international travel and
tourism, greater immigration (legal and illegal) and that there are more
than two hundred million migrants around the world today, however hard for
economists to measure.

From this I can conclude that first the definition is broad, easy to
describe and explain what it does and the effects it has, such as the more
integration of foreign direct investment and migration, however it is much
harder to define. Is it 'new' depends upon context I believe, in comparison
to other theories about when it started then certainly, to modern society
(who have seen the affects, and acceleration of globalisation) then no. The
measurements to be used were that of trade, migration and capital flows
etc. all relative to comparison but can never fully put a measure as to
when one decade period of the time was more influential than another, the
1870's there was the gold standard occurring playing a detrimental part in
the confidence of trade, then in 1810's there was the ability to migrate
easier, all respect to one another. Globalisation today is broader than it
ever was, but it has proven people can cause de-globalisation with blocks
and protectionism etc. also the measures globalisation are wider effecting
culture, not just looking at trade etc.


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