Globalization, what economic and social changes does it bring?

Globalization's impact is profound, intertwining economies and cultures. Yet, its effects are a double-edged sword, fostering interconnectedness while posing risks such as economic inequality and cultural homogenization.

October 31, 2023

Sushree Behera

The current world is battling with a lot of things. Natural disasters, virus attacks, newly discovered diseases, and whatnot. What’s more unfortunate is that the changes that were meant for the development of mankind are attacking back. One such change that is very significant is “Globalization.”

Globalization, as a term, is well-known to almost everyone. Students read about it in their academic syllabus, adults talk about it during tea breaks, and professionals who were previously excited about it are now worried in their guts, thinking about the effects of it.

So, let’s discuss the effects of globalization and risks in detail so as to understand it deeply and become aware of the consequences.

Table of Contents

What is globalization?

In simple terms, globalization is a term that is used to describe how improved technology and trading facilities have made the world into a more interdependent and connected place. It also consists of the economic and social changes that have come as a result of it.

One can portray globalization in his/her head as the strings of an immense spider web formed over a vast period of time, with the number and reach of the strings increasing over time. One can say that globalization took birth between 50 B.C.E. and 250 C.E.

The Silk Road laid the foundation stone of globalization as it is the oldest known route where the exchange of customs, ideas, and materials took place. The age of revolution boosted the need for globalization, and the exchange of ideas and materials started happening on a large scale.

The cross-border trades and exchanges have made the world population interdependent on each other’s economy, culture, and traditions. Mainly, countries are focusing on establishing economic partnerships with each other for a symbiotic relationship.

Causes of globalization

For any change to occur, there are always a few factors and catalysts responsible. The same goes for globalization, too. There are a few major responsible factors that caused globalization to make quite an impression in front of the world.

Improved trade is the first major cause of globalization. The world felt the live effects of it when frequent trading started happening between two or more countries. The import and export activity has allowed the world to taste the flavors of different parts of the globe;

Transportation facilities further add to the process of globalization. With the convenience of transportation over land, water, and air mediums, goods and services can be easily sent and brought from another nation. People are now free to travel anywhere in the world for entertainment, deals, and reforms;

Technological improvement is by far the most responsible cause for global integration. People are now conveniently sharing data and information from one place to another. The Internet has brought the whole world into our fists. Communication, in short, has become easier now;

Increased labor is also an important cause of globalization. Globalization has greatly affected the labor class. The working community migrates for work, sometimes jumping the domestic boundaries and sometimes beyond the national boundaries.

Effects and risks of globalization

The effects of globalization were not so visible earlier. In the meantime, people were only able to see how it was reforming the entire society. However, in the past few years, or let’s say in the last decade, there have been a few risks visible by the effects of it.

Due to globalization, there is a rising conflict between the upper class and the working class people. With the inclusion of advanced machinery, the need for manual labor has been reduced. Many owners have released the laborers, and some have cut down the wages of laborers;
Economic disturbance is another issue. It has caused an excessive money supply from the central banks to the asset markets. When the market bubble bursts, it results in a worldwide slump in economic growth. All the companies, domestic and international, go berserk in this period;
Lately, geopolitical conflicts and debates have started emerging. Countries like North Korea, Venezuela, China, Ukraine, Syria, and Afghanistan are involved actively in such geopolitics. This kind of disturbance becomes a hindrance in the way of world peace;
Globalization is increasing the GDP in all the participating countries. However, this creates an economic struggle for the common people. To increase the GDP, there has been a sudden spike in the prices of goods. In short, it has negative economic effects on some people;
Other effects of globalization are also there, like technological disruptions, degrading quality of morals, excessive dependency on foreign goods, debts, etc.

So, these were the harmful effects of globalization. Though there are many benefits of it, we must not forget about the risks involved. It is an agreeable fact that globalization can’t be abruptly paused, but the governments of respective nations must put forward a few measures to keep the risks in check.