Economic globalization has a vast influence on cultural, technical, political and social integration. The economic globalization is a series of procedures undermined by the human agencies thus makes it hard to obtain in a single definition. Also, there is a reforming argument about the neoliberal economic globalization, while some suggest that globalization provides economic liberalization to gain more profits, as the wealthiest countries tend to be most open to the rest of the nations regarding investment and trade (Rodrik). However, others disapprove for the reformation of neoliberalism since liberal countries are also “ the one with extensive and effective regulation” (Rodrik), “biggest governments” (Rodrik), and “the widest social safety nets” like “social insurances and housing benefits” (Ramzy). As a result, the complexity of neoliberalism initiates both negative and positive consequences. After all these intense discussions, critics suggest various solutions to deal with the new crisis and different problems.
People have contrasting views about economic globalization while economic globalization is said to be too complicated “Globalization Paradox” (Rodrik). Those who distinguish economic globalization by neoliberalism as political and human freedom has never existed and cannot exist without a large amount of economic freedom (Friedman). International economic institutions like IMF and WTO lowers the cost of living while providing more choice of products (Sergie) and also by establishing structures and rules for international trade (Sergie). The just competitive system leads to more innovations, stable markets and resonates price levels. Rather, many MNCs “transfer capital to the “developing world” (Love), to offer many job opportunities, create more access to
international trades and promote educational programs. Moreover, neoliberalism reduces the “gender wage gap”(Bhagwati) through competitive international markets “cut any and all fat from the firm” (Bhagwati) to decrease the “price paid for prejudice” (Bhagwati). However, people blame neoliberalism as “there is no such thing as a free market”(Chang) while any restrictions on the flow of capital or goods across the borders would greatly affect the efficiency and economic growth (Rodrik). The United States emphasizes the “free market ideology”(Rodrik) on the developing nations via the interventions of the IMF and the WTO. The administration of the international institutions IMF is condemned as a long-standing gentlemen’s agreement (Masters) — the control of the World Bank to an American and that of the IMF to a European (Masters). The fixed regulations leave little resources and low chances to the developing world so that the critics speculate the legitimacy of the institutions like IMF. In the meantime, the “free-market ideology” (Rodrik) is never universally approved while developed nations spent up to 365 billion dollars in subsidies and protections (Love) to avert cheaper products from developing countries to occupy their primary markets. In response to this, the developing countries like India, South Korea, and China also secure their key industries by maintaining informal and formal barriers to imports and by manipulating their currency (Rodrik). Furthermore, unauthorized global economic transactions play an important role in the world economy, through globalization it has already become “one-fifth of the planet’s gross domestic product.” For example, astringent crimes like arms, drugs, oil or human trafficking were adopted by the Russian mafia after the collapsed of the Soviet Union. While the
debate on economic globalization is still controversial as some consider neoliberalism as a boon while other suspects it to result in adverse changes and consequences.
Based on the argument between defenders of neoliberalism and critics, my notion of the positive outcome is economic freedom preserving personal freedom (Friedman). For instance, Hong Kong is a city with no industries, no natural resources, and no production. But it is a center with “no duties, no tariffs on imports or exports” and operates as “the freest market in the world” (Friedman) for 40 years. This important market offers Individuals freedom to trade with anyone and to go into any industry. Hence, people “bear the cost” (Friedman) in the free market, who might buy it at a low-price around the world and sell it at a more higher price around the world (Friedman). Another positive consequence is the “complete absence” (Friedman) of tariffs and any other rules and restrictions on trade thus increasing the standard of living. Despite the open market of hong kong being chaotic, it stills maintain orders below “the impersonal forces of a free marketplace” (Friedman). On the other hand, my perspective on the negative outcomes is that neoliberalism is naturally “disruptive” (Rodrik) and fluctuating without the examination of governments and markets. For instance, thousands of disappointed and agitated Chilean students protested against “the unaffordable cost and low quality of higher education” (Roos) meanwhile it is in contrast with the autistic neoliberal idea that healthcare and education are services, not public goods (Roos). Another negative instance of neoliberalism is those female migrant workers are better off in the new world of autonomy and attachments (Bhagwati). I don’t entirely agree with this
statement since better off in the modern world could be comprehended in different ways. On the one hand, they feel better off because the money earned by work could help them with providing food and pay for the survival of their hungry children and families. While on the other hand, they endure distress and pain taking care of other kids every day while being separated from their children and feel excluded from their children’s lives.
According to both the negative and positive consequences of neoliberalism, there are several solutions suggested by the critics. One consideration would be that open markets can succeed when immersed in political, social and legal institutions that allocate them legitimacy by assuring that the benefits of capitalism are broadly shared (Rodrik). Another consideration would be that government and markets are “complements” (Rodrik). For instance, neoliberalism is characterized as “disruptive” so that it demands inspection of governments and financial institutions. One of the solutions to deal with this overpowers suggested by critics is that the extent of a market is limited by the workable scope of its rules and regulation (Rodrik). In real life, neoliberalism deals with the difficulties of the “fundamental incompatibility” (Rodrik). Despite coming with a positive aspect of the “hyper-globalization” (Rodrik), that is the deep integration by building stable global economies and promoting international trade systems. Neoliberalism also brings the negative aspect of “democracy and national sovereignty” (Rodrik) which allows the shallow inclusion of illicit economic transactions like “drugs, blood diamonds and human trafficking” (Friedman). Lastly, the critics suggest that the entire neoliberal economy keeps in check through solutions like “effective
and extensive regulations” (Rodrik), fair “rules and structures” (Sergie), and equal opportunities and resources.
Work Cited
Austin, Ramzy. Workers Strike at Shoe Factory Over Benefits Dispute.
Dani, Rodrik. The Globalization Paradox.
Ha-Joon, Chang. Thing 1. There is no such thing as free markets in: 23 Things They Don’t Tell You about Capitalism.
Jagdish, Bhagwati. Women: Harmed or Helped?" in: Defense of Globalization.
Jerome, Roos. In Chile and Israel, A Revolt Against Neoliberalism.
Jonathan, Masters.The International Monetary Fund.
Maryann, C., Love, & Richard, A., Love. Multinational corporations. Power and Responsibility.
Milton, Friedman. FREE TO CHOOSE: The Power of the Market.
Muhammad, A., Sergie. The World Trade Organization.