Term Paper on "Globalization Weakens the State"

Term Paper 6 pages (1954 words) Sources: 14 Style: Chicago

[EXCERPT] . . . .

Globalisation weakens the state. Discuss.

Globalization is clearly one of the most controversial topics of the last decades, opinions on the matter being extremely different. When speaking about whether globalization weakens the state, there are several arguments that must be taken into consideration, both pro and con. This paper first deals with the question of whether globalization is benefic or not, pointing out that this subject can be discussed in several manners depending on the example provided. The answer to the main question, of whether globalization weakens the state or not, is also highly dependent on the way the matter is treated. It is hard to make a clear statement that globalization is good or bad for a state. There are arguments on both sides of the issue. I presented both parts, arguing both that globalization brings prosperity and that it brings more economic power to a state and that globalization shifts power from the government to the private sector.

Globalization is seen as both good and bad, both as the road to prosperity and as the road to poverty. It depends on who expresses the opinion, his arguments, but most importantly his examples because globalization has had different effects depending on the region. There are countries that experienced great prosperity for the many and thus reached a higher economic level and there are countries in which globalization only meant prosperity for the few. There are great differences in how globalization was handled and done in various parts of the world and these differences come from how globalization was managed. The examples provided by Joseph Stiglitz clearly show that there are different outcomes of globalization depending on who manages it: in East Asian countries globalization was managed by the states themselves and thus it meant prosperity for the many and had a very important economic impact; countries that have had globalization managed for them by the International Monetary Fund or other economic institutions have not managed to know prosperity from globalization (Stiglitz, 2002, p. 1). So, it is hard to draw one conclusion regarding whether globalization weakens the state or not, because the answer depends on the specifics of the state we analyze. Besides, there is more than just an economic view of globalization. Those that argue against it often bring into discussion matters of national and cultural identity.

The best examples that globalization works and is benefic for the economic development of countries are those of East Asian countries that have adapted themselves to a capitalist market economy and took advantage of the free market in order to sell their products. In these countries, poverty was actually reduced and they have known an unprecedented economic growth. The lesson that these countries applied seems simple: they took advantage of the global market for their exports and they managed to close the technology gap between more developed countries and them. By doing this, they became actual competitors on the global market and this can be seen in the economic growth that followed. Prosperity in these countries came in different ways, as some countries developed after opening up to multinational corporations and others, such as Taiwan, created their own corporations. But most importantly, globalization turned up to be a benefic experience for these countries because they each understood globalization in their own way and applied it as to be in the interest of the many. In these countries, globalization was made in an equalitarian way and so it benefited the many. Because the many benefit from globalization, we can say that these are positive examples that prove that globalization works. The negative examples are the ones in which the benefits of globalization were distributed among the few.

There are clearly great benefits that come from globalization. Besides economic growth for countries that manage to adapt themselves to the values of globalization, there are other benefits that every one of us encounters daily. The most important aspect of globalization is that information travels freely all over the world and thus people are not only more informed, but information is used in their benefit. For example, technological developments reach in no time all parts of the world, providing a better living standard for people all over the world. Another example is that medical developments can be applied a lot faster all over the world and thus improves the health of those countries that benefit from globalization. These benefits can not be argued against, although there are several serious arguments against globalization. Discussing globalization and the pro's and con's is impossible without accepting that no matter on which position one stands, it is impossible to deny that there are both advantages and disadvantages.

Developing countries are the ones that face the greatest disadvantages of globalization. Given their instability or relative recent stability, developing countries find themselves unable to protect themselves from the crisis of the global market. Small developing countries find it almost impossible to resist on a liberalized capital market, especially when dealing with a crisis. Stiglitz gives the example of Argentina, which after a relative period of economic growth faced high interest rates in 1998 as a result of the economic crisis in Russia. This is how developing countries find it almost impossible to resist in a crisis that affects the global market. In this situation, globalization does weaken the state and developing countries or poor countries are the sure targets of globalization.

It is extremely difficult for a country that is just adapting its economic policies to the global market to face the volatility of the market. Investors are reluctant in investing in a poor country and so it is difficult for the country to face economic growth. Besides, not only that growth is not enhanced, poverty is even more likely to occur. In this situation, it is the poor population that becomes poorer due to the fact that the state usually supports foreign investments with low taxes as the population must carry this burden too. When speaking in economic terms about globalization, it is clear that it depends very much on the examples you present. There are success stories of countries that took advantage of globalization to turn things in their favor and there are countries that became even poorer as they failed to comply with the demands of global market.

As globalization increases, there is also an increased reliance on private sector credit and insurance markets as a way of smoothing income shocks (Friedman. 2000. p. 59). Considering this, governments must supervise and regulate the financial market. The role of regulating its own economy means that the state is not as powerless in front of globalization. Of course, the rules of regulations, not only at state level but also at global level, are extremely important and make the difference between a country that can face a global economic crisis and one that does not.

The rules of globalization do not and can not apply to all countries. This is why for some countries globalization works and for others it does not. In some states globalization works and it is efficient for the prosperity of the population. In others, it only deepens the level of poverty.

One can not make a clear thesis pro-or against globalization based solely on economic arguments, because globalization is also translated in terms of threat against cultural identity. Most of the supporters of anti-globalization movements base their arguments on matters of cultural identity, stating that globalization causes states to lose their individuality, thus losing their powers. This becomes even more obvious when dealing with non-western cultures that face globalization. Here the effects of globalization on cultural identity can be seen more obviously. The tendency of globalization of making each state fit a certain profile of a consumer society greatly affects the state's individuality.

This is the main problem with globalization and the main reason for which it does more wrong than good in some areas - that it presents only one model of success that must apply to all cases. It is virtually impossible to create a world in which different states behave in the same way, irrespective of their background. In theory, globalization might be the best alternative for economic growth, but there are some cases in which the theory can not be applied as easily.

Globalization empowers the private sector to such a level that the government finds itself in the impossibility of acting without the agreement of the private sector. Considering that the private sector is responsible for economic growth, its power over the state increases to such a degree that the government must always respect the decisions of the private sector. Globalization dictates policies in all countries that know economic growth. In order to have economic growth, states give up some of their powers and accept to support the policies promoted by the private sector. This is not in all cases a positive thing, but it clearly is the only alternative at this point that has proven to provide economic growth. So,… READ MORE

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