Impact of Globalization and Neoliberalism

As an economic and political program, neoliberalism promises that everyone will able to gain from the benefits of globalisation but in practice there is clearly great disparity. Discuss with reference to the advantages and disadvantages of neoliberalism and flobalization. Use relevant evidence to support you point of view or opinion.
What (description, definitions, relationship between neoliberalism and globalization…..)
Why problems happen? (evidence, analysis)
Perspectives, assumptions……(reality, knowledge)
Do not just describe general issues.
Give arguments by analyzing positive or negative consequences of neoliberalism and globalization.

Introduction

Globalization is an aspect that has been under discussion for quite an extended period, and refers to the increasing integration of state economies and expanding into the global markets. The expansion is an implication that there is free movement of products, labor, services and capital from one economic region to another (Hart-Landsberg 2013). The aspect of globalization has raised numerous discussions since its rise in the 1980s, with scholars trying to expound on its relations and impacts over political, social, cultural and economic affairs across the national borders. Although globalization appears as a simple phenomenon, it has been noted to be a complicated aspect due to its relations to the national economies, which required the adoption of neo-liberalist theories so as to consider a basic political and economic issue of its implementation (Morley et al. 2014). Scholars believe that globalization is irrelevant without theoretical explanations and is deemed to be the 21st-century capitalism. Neoliberal globalization is entirely characterized by the rule of the market, privatization, reduced public spending on social services, deregulation, and elimination of the aspect of public good and replacing with individual responsibility among others (Harris 2000). Due to neo-liberalism, most countries focus on the aspect of economic growth rather than the welfare of its citizens, and in return, bringing secondary benefits to the people than promised (Stromquist et al. 2002). The global economic order requires that all participants of international trade implement liberal trading policies, which are essential to healthy economic growth to the individual state and the world economies as a whole. Globalization plays a significant part in the economic expansion of the developing states due to its creation of new opportunities that include the transfer of technology, expansion of the market to the developed countries, improved productivity and the living conditions of the people. However, due to the aspect of neo-liberalism, it is notable that globalization promises better than it delivers to the people (Kotz 2010). The essay analyses the benefits and demerits of neoliberal globalization to ascertain if it delivers on its promises to the population of the concerned states.

Impact of Neoliberal Globalization on People’s Livelihoods

Neo-liberalism refers to the set of economic regulations spread over the last three decades and emphasizes on the benefits of free market competition. The aspect is closely linked to Laissez-faire economics, and characterized based on the belief in sustainable economic development as a means towards achieving human progress (Kotz 2010). Neo-liberalism also views competition as a characteristic of human relations, hence redefining the people as consumers whose rightful choices are exercised best by purchasing and selling, a process that has been noted to reward merit, but on the other hand, punish inefficiency (Thorsen and Lie 2009).

Advantages and Disadvantages of Neo-liberalism

Advantages

Neo-liberalism has been noted to enhance the efficiency and effectiveness of a global market economy due to its responsibility for the reduction of disturbance influence from various agencies that include governments, groups of manufacturers, and corporations among other stakeholders. Through liberalism, businesses can produce goods and services actively, and in turn, increase their profitability (Brady et al. 2014).  An increase in production efficiency by businesses and producers results in improved products and services to the society which can be easily achieved at a cheaper cost. When goods and services become cheaper, people can afford them and thus enhancing their quality of life. Cheap products enable people to save on their spending and in return create wealth which is essential for the prosperity. Countries with an excess labor force are able to export labor to foreign countries and in so doing create income for the populations, thus enabling them to meet their daily needs and save for the future. Free market policies imply that countries can export surplus products, thus boosting the income levels to the producing populations and in return promoting better livelihoods. The ideology of neo-liberalism is the central power of globalization, considering that it encourages free trade between countries and the integrity of the markets as it boosts the exchange of information and beliefs around the globe. People are able to capitalize on liberal ideologies to accumulate wealth by co-opting democratic institutions, war profiteering and nation building towards achieving better livelihoods (Siddiqui 2012).

Disadvantages

Although neoliberalism is one of the important ideologies that promote a common global wellbeing, it is one of the core causes of various social, economic and political problems seen in the world currently. The ideology has led to the increase in the gap between the rich and the poor in the society. It is noted that only 1% of the global population take up 40 percent of the finances generated in the entire world (Coutts and Gudgin 2015). The reason for the increased wealth difference is the emphasis on efficiency by neoliberalism, which was aimed at promoting competitions between individuals. In emphasizing on efficiency, the ideology overlooks on the need to consider the welfare of the people, who are responsible for the achievement of efficiency. The ideology takes humans as tools for achieving productivity and in return, the rich become richer, while the poor become poorer, a phenomenon not only seen in people, but also in companies. The competition resulting from government controls causes a wider economic gap between people and businesses (Forrest 2009). The other cost of neoliberalism is the rise of unemployment index, whereby individuals with lesser capability finds themselves in unemployment since someone with greater ability gets the job. Since the regulations on employment by governments are ignored due to liberalism, states become insensitive to the issue of unemployment, resulting in family depression due to higher expenditures (Pramono 2005). Since globalization is an aspect of neoliberalism, its achievement is not considered a status quo in a positive way, as globalization results in the destruction of iconic cultures in the affected nations, and in turn, force the poor and underdeveloped countries to yield into the pressures of the of the developed countries, which lead to the straining of the country’s economy. Through neo-liberalism, the ruling group imposes their ideas and belief in the minority class, thus undermining the aspect of equality in the society. The voice of the ruled is suppressed thereby left with no other option rather than follow the commands of the rulers despite being against their wishes. Societies with one group dominating the other, results in oppressions in most cases, hence making neo-liberalism more harmful than as perceived by many.

Advantages and Disadvantages of Globalization

Globalization refers to the global movement towards financial, economic, communications integration and trade. The aspect represents the opening up of national and nationalistic views to a broader case of an interdependent and interconnected globe characterized by free movement of goods and services across regional boundaries. Labor also forms part of globalization, and the perception by most economists has been found to have a negative influence on fragile economies. Globalizing processes are significantly affected by work organizations, businesses, socio-cultural resources and the natural environment (Thorsen and Lie 2009).

Advantages

Globalization has opened up the borders of many nations to international business and thus, aiding the poor and developing countries to meet their deficiencies through trade with the developed countries. Through globalization, countries are able to export human labor to other regions and thus solving the unemployment challenges. When people get a source of income, they are able to meet their needs and in return live better lives. People are able to appreciate each other despite the various differences like race, religion, culture and nationality for the sake of a common interest which is bettering their lives. As people move from one region to another in pursuit of employment, they are able to meet their needs and acquire more skills through exposure and hence bettering their lives. The entry of various companies into new markets presents diversification of products and services in the global markets, and in so doing, results in the availability of various products for choice by the people. When individuals consume their preferred brands, they are satisfied and thus live better lifestyles. Free transfer of capital helps the emerging nations to develop economically and create conditions for democracy and the upholding of human rights, although not all countries have managed to achieve the goal (Gamage 2015).

Disadvantages

Although globalization opens up national borders for trade, it kills internal competitions by letting the superior economic states to suppress the weak ones, and like neoliberalism, globalization results in an increased wealth distribution gap between the rich and the have-nots. Through unregulated competition, the weak parties are surprised by the superior ones, hence ignoring the ideology for competition where all parties seek to benefit from the competition. The native people become disadvantaged with the entry of foreigners as they are expected to compete to survive otherwise they lose and suffer (Forrest 2009). The entry of foreigners into a country results in the distortion of traditional cultures of many nations and groups with the western culture propagating the world to a uniform culture. The entry of multinational corporations into secondary markets has also resulted in social injustices on the employees through unfair working conditions with no concern for the environment resulting in ecological damage (Brady et al. 2014). The biggest threat of globalization is the rise of a global elite group that will eventually be the rulers of the world

Perspectives of Globalization and Neoliberalism

From a wider perception, it is evident that neo-liberalism is one of the discourses that make up globalization, focusing on the need for free flow of capital, products and services across states, capitalizing on the cultural, geographical, economic and social flexibilities of other countries. Neo- liberalism relates to globalization in the essence that it is globally visible due to the transformation of an economic and political entity noted through the wide range of societies throughout the world. Neo-liberal systems in political and socio-economic systems make up the world and are found everywhere, thus making it part of globalization (Pramono 2005). Neo-liberalism has evolved into an ideology that is available globally with typical examples being the spread of forceful overthrow of the government in Chile, the rise of Margaret Thatcher in the UK towards implementing liberal policies and the overthrow of Saddam Hussein in the year 2003 due to the implementation of strict liberal regulations by the US (Kotz 2010). The trend notable in the political and economic realignments in the world is due to the application of liberal policies makes neo-liberalism an aspect of globalization.

Globalization is not a new culture, but rather a minor transformation of the international perceptions. It is a mindset that has a capability of encapsulating the world into a scheme of items and open to receive incoming ideas. Globalization also opens up new opportunities both locally and internationally, thus promoting foreign competition that is essential for economic growth guided by the concept of interdependence (Stromquist et al. 2002). Neoliberalism, on the other hand, is characterized by the free flow of capital and labor and capital based on the assumption that with the free movement of human capital, labor can be outsourced to countries suffering from deficiencies and characterized by less human rights regulations. The other characteristic of neo-liberalism is the aspect of privatization, whereby public companies and business are turned into private entities through the shift of ownership with the aim of achieving efficiency (Forrest 2009). It relates to the capitalist approaches, though it believes in competition as the best motivator of economic growth, profitability and investment.

For globalization and Neo-liberalism to be realized, many assumptions are made and include the believe that markets will not be disturbed and will result in an equilibrium status, benefiting the people through value promotion. The second assumption is that the investors and consumers will make informed decisions and choices in the free market environment, with market crashes only resulting due to the distortions arising from government interventions. The other assumption is that when public and private businesses compete, there will be no market distortion, although the private firms will thrive in the engagement (Morley et al. 2014).

Conclusion

From the analysis, it is evident that globalization and neoliberal ideologies are harmful to the individual, corporate and societal development. The problems caused by the ideas supersede the benefits and more so cause long-term problems in the economic status of a nation. Big companies thrive at the expense of the smaller companies who are obliged to follow the structures of the major corporations. The poor in the society continue being poor while the rich get richer, as the distribution of wealth becomes unjustified. Unemployment cases increase for the less capable as opportunities favor those who have better abilities. The core reason for the ideologies resulting in the problems is the inability of governments to further provide regulations. For the beliefs to be entirely beneficial, then it is necessary that regulatory policies are maintained.

Reference List

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