Yet, based on experiences throughout the world, several basic principles seem to underpin greater prosperity. These include investment particularly foreign direct investmentthe spread of technology, strong institutions, sound macroeconomic policies, an educated workforce, and the existence of a market economy.
Quantitative studies have shown that trade fosters peace both directly, by reducing the risk of military conflict, and indirectly, by promoting prosperity and democracy. Globalization can be understood as a process of market expansion and market integration, as the universalization of capitalism.
After a short discussion of the political economy of globalization, I turn to the frequently overlooked security benefits of globalization. The diffusion of prosperity, free trade, and democratization is part of the story. Quantitative studies provide a great deal of evidence for a causal chain running from free Globalization promoting stability and prosperity essay via prosperity and democracy to the avoidance of military conflict, as well as for another causal relationship between trade or economic openness and conflict avoidance.
After a review of the quantitative literature and a discussion of some methodological issues, I illustrate the capitalist peace by historical examples and contemporary applications. The Political Economy of Globalization The process of globalization had already begun in the late nineteenth century.
Before World War I, trade and foreign investment were fairly globalized. Because of low political obstacles to international migration, labor markets actually were more globalized at the beginning of the twentieth century than at its end.
The two world wars and the Great Depression between them interrupted the process of global market integration for about half a century. Thereafter, the process regained force and speed. Now, inexpensive, fast, and reliable communication and transportation enable producers of goods and some service providers in low-wage countries to challenge high-cost producers in rich countries on their home turf, but technological innovation resulting in falling prices and rising speed of intercontinental communication and transportation is not the only determinant of globalization.
Political decisions in rich and poor countries alike contribute strongly to globalization, too. Tariffs and, to a lesser degree, nontariff barriers to trade have been reduced. Many countries try to find and exploit their comparative advantage, to realize economies of scale and gains from trade by looking for buyers and sellers everywhere.
If trade between countries is truly free, then it promises to enrich all nations.
In principle, globalization is the logical endpoint of the economic evolution that began when families switched from subsistence farming and household production to production for the market.
As long as globalization is not yet completed-and it certainly is not yet-gains from trade remain to be realized by further market expansion. Because globalization adds to competitive pressure, however, it causes resentment, and because globalization springs from technological innovation and political decisions that promote free trade, these innovations and decisions attract resentment, too.
The world is already globalized enough that national resistance does limited damage. Free trade is vulnerable. If foreigners are perceived as a cause of the need to adjust, then attacking free trade becomes politically attractive.
After all, no politician benefits from the affection of foreigners who cannot vote. Of course, economists who insist on the benefits of free trade even if your trading partner does not practice free trade are right. Benefits include serving customers better at lower prices, but also faster growth of total factor productivity Edwards ; OECD The benefits of free trade, however, tend to be dispersed widely, whereas its costs for example, certain bankruptcies and job losses tend to be concentrated and more visible.
Therefore, the political case against free trade may become very strong despite the weakness of the economic argument. Who in rich Western societies is affected most by globalization?
Although unskilled labor is much less expensive in poor countries than in rich countries, this difference does not necessarily provide poor countries and poorly paid labor there with a competitive advantage.
Frequently, even unskilled labor is much more productive in rich countries than in poor ones. If the wage gap is neutralized by a countervailing productivity gap, unit labor costs are not affected by international differences in pay.
The wages of low-skilled Western workers may suffer from downward pressure because their services have become more easily substitutable than previously Rodrik This process might result in growing volatility of earnings and income inequality, as in the United States, or high unemployment, as in much of Continental Europe.
Of course, unemployment is most likely to result from a combination of fierce international competition and rigid labor markets at home. Otherwise, trade is more likely to affect the composition of employment than its amount Irwin Analysts dispute the degree to which either trade or technological progress has caused the predicament of unskilled labor in the West.
Although the majority view for example, Krugman blames most of it on technological progress, this conclusion is not entirely satisfying because technological progress is frequently inferred from estimated production-function residuals rather than from direct measurement.
An outspoken minority for example, Woodputs most of the blame on free trade and estimates that approximately 9 million manufacturing jobs might have been lost in rich countries by and many more by now.
The complementary gain of 23 million jobs in poor countries may satisfy humanitarian impulses, but it does not help Western politicians to win elections. Although trade is almost certainly not the primary determinant of this job loss or of increased wage inequality Irwin99some Americans look for scapegoats.Globalization: Sharing Our Prosperity With the World Essay - Globalization is the growing interdependence of the world's people that involves the integration of economies, technologies, and cultures (Bradshaw).
By promoting capitalism, economic freedom, trade, and prosperity, we simultaneously promote peace. Conceivable instruments to promote capitalism, economic freedom, free trade, and prosperity include advice about the institutional and legal foundations of capitalism and economic policies.
China’s Win-Win Globalization Since the early s, China has been making a concerted effort to integrate itself into the world economy and cultivate relations with its Asian neighbors, as well as the U.S., in order to promote stability and prosperity in the region.
Essay on Globalization: Promoting Stability and Prosperity - "Together we can help transform the global economy into a global community." -- Robert Alan Silverstein “We must ensure that the global market is embedded in broadly shared values and practices that reflect global social needs, and that all the world's people share the benefits of.
6 ECONOMIC GLOBALIZATION AND POLITICAL STABILITY IN DEVELOPING COUNTRIES In the future, prosperity will depend increasingly on the capacity of states to manage change and provide key the impact of economic globalization on political stability in developing countries.
Globalization And Its Impact On Malaysia Media Essay. Print Reference Technological innovation is the part of promoting and speeding up globalization, it also going to replace the skills of workers nowadays.
where people & nations all over the globe come closer and closer with lesser & lesser conflict and greater & greater prosperity.