Globalization is the historical form of paradox of capitalism's growth. Anti-globalization rallies and demonstrations across the world in recent time’s interest groups mobilized diverse groups opposing negative aspects of globalization without really articulating the nature and type of world order in quest. World wars, depression and cold war between the socialist and capitalist camps thwarted the process of globalization.
Globalization is the historical form of paradox of capitalism's growth. Anti-globalization rallies and demonstrations across the world in recent time’s interest groups mobilized diverse groups opposing negative aspects of globalization without really articulating the nature and type of world order in quest. World wars, depression and cold war between the socialist and capitalist camps thwarted the process of globalization.
Globalization which has become the password to enter into any area of world economy can be attributed to Marx's original insights... While formulating the law of motion of capitalism Marx predicted that in it’s strive to maximize the valorization process, capital takes steps to transcends any impediment or barrier to that process. According to Marx, once a barrier is transcended another barrier appears as consequence to the transcendence of that barrier. The fate of capitalism depends on this barrier-transcendence-barrier theory of motion.
To quote from Marx (1981):
"Capital is capital is endless and limitless drive to go beyond its limiting barrier every boundary is and has to be a barrier for it. Else it would cease to be capital... But from the fact that capital posits every such limit as a barrier and hence gets ideally beyond it, it does not by any means follow that it has really overcome it, and, since every such barrier contradicts it character, its production moves in contradictions which are constantly overcome but just as constantly posited."
The term globalization broadly highlights the growing integration of economy world-wide through increases in trade, investment flows, and technology transfer. In recent years, this has been enhanced by rapid advances in communication and information technology, as well as international policy environment which lay emphasis on trade liberalization, privatization, and deregulation of financial markets (Williamson 1996:6).
The pace of global integration-the widening and intensifying of international linkages has accelerated over the past decade... The pace of integration among developing countries has been very uneven. Though in aggregate developing countries are kept pace with the world rate of trade integration, the ratio of trade to GDP fell in forty-four of ninety-three developing countries in the past ten years.
Growth and increased integration are mutually reinforcing, and both depend critically on the nature of policies and institutions. The higher returns associated with faster growth increase farms' demand for imported capital goods. As incomes rise, consumers demand for variety, as reflected in higher import of consumer goods, and faster growing countries attend to attract more foreign investment (World Bank: 1997). Thus the globalization process entails heightening inequality among the nations of world and loss of economic sovereignty to the desires of giant global corporations.
Proponents of globalization argue that welfare benefits accruing from increased specialization such as lower import prices and increased flow of capital and technology across countries lead to higher standards of living. They also point at more efficient allocation of savings and structural changes in economies, both of which augment growth. Critics of globalization argue that unrestricted trade and capital mobility result in low wage attracting industries away from high wage areas, thus lowering living standard in the latter.
Some argue that global financial markets undermine the ability of sovereign nations to pursue an independent economic policy. The extent of globalization can be assessed in the following areas:
(1) The expansion of international trade,
(2) The emergence of regional arrangements,
(3) The growth of international private investment flows,
(4) Greater independence across financial markets. So far expansion and diversification of trade is concerned, there is evidence that global integration lagged relative to integration of domestic markets. A perfectly integrated global market-place implies cross-country price convergence for traded goods.
Finally, globalization presupposes the spread of policy ideas. Now, the global economic order is not founded upon individual state power and rules, but also on a set of ideas and policy prescriptions. These are imposed through international organizations formally and through textbook paradigms upholding orthodoxies that emanate from an informal network of research bodies and educational institutions. It does seem that the much trumpeted success of the globalization process is riddled with contradictions.