Violating an Ethical Standard
Nowadays, we live in a world which is characterized by the expansion of the connections between nations that force changes in different spheres of life, including the economy. The scholars argue that the processes of globalization and integration are two most significant tendencies of the modern world.
The aim of this essay is to analyze the process of globalization and its impact on the international economy.
Such modern issue as process of globalization in the context of economic development provokes a lot of debates, which raise a question whether this process influences the world economy positively, ultimately leading to the nations’ prosperity, or negatively, deepening the crisis phenomena in the economy.
Joseph Stiglitz, the Nobel Prize winner on Economics and the outstanding representative of the Neo Keynesian School of economic theory, gives us a clear understanding of the negative impact of globalization on the world economy. In particular, Ocampo & Stiglitz (2008) state that “globalization can lead to crises due to the importance of external factors, even in countries with sound fundamentals and even in the absence of imperfections in international capital markets.”(p.60)
It is obvious that the strong dependence on the external environment makes the economy of a certain country more vulnerable to the threats of the negative changes outside the domestic economy. It is an unarguable truth which makes any other conclusions irrelevant.
A number of important measures of the economic development are in place to argument the effects of a particular event or phenomenon on the economic development. The foreign direct investment, financial market volume, price fluctuations, and a lot of others are among them.
Ocampo & Stiglitz (2008) also conclude that “…financial market integration, including foreign direct investment, does not have a strong positive effect on growth…” (p.89)
Personally, I dispute the continuing liberalization of free trade, which is one of the main drivers of the economic globalization.
In order to summarize all above mentioned, it should be said that the process of globalization makes an extremely negative impact on the development of the world economy. The interconnectedness of the capital markets increases the volatility of the assets on the trading platforms, which makes the whole international trade difficult to predict. The studies of Joseph Stiglitz, the Nobel Prize winner on Economics, provide us with the clear understanding of the negative consequences to which the process of globalization lead.
Discussion on Ethical Standard Violated
Taking into account the summary of the rhetorical fallacies developed by Acker, it can be said that the essay given above falls in the group of Ethical Fallacies presented by the author (Acker 2006). Precisely, the essay exaggerates the findings of Joseph Stiglitz and presents his opinion like the only right one. In addition, the essay misrepresents the actual results of Stiglitz’s research as he marked not only negative outcomes of globalization but also positive ones, which have been omitted in the essay, making its conclusions biased toward the personal opinion of the essay author himself. As a result, the essay makes the audience misguided with the real discussions on this issue.
Adhering to Ethical Standards
Nowadays, it is widely stated by scholars that the processes of globalization and integration are the two significant modern tendencies making changes in the world paradigm. Touching upon different spheres of life, including the economy, globalization represents one of the most discussed issues.
The aim of this essay is to analyze the process of globalization and its impact on the international economy.
First of all, it would be logical to try to explain the term of globalization itself. There are lots of versions of the term explanation; one of them belongs to The World Bank which gives the following definition,
“Globalization is an inevitable phenomenon in human history that’s been bringing the world closer through the exchange of goods and products, information, knowledge and culture” (Globalization, 2013, par. 1)
The controversy surrounds the consequences of the process of globalization and its influence on the world economy, in particular. Joseph Stiglitz, the Nobel Prize winner on Economics and the follower of the Neo Keynesian view in economic theory, is among the opponents of the financial globalization. Ocampo & Stiglitz (2008) claim that although globalization provides certain benefits to the developing economies including the formation of their financial system, characterizing by more stable, predictable, well-informed, and efficient global financial markets (p.50), it also makes the financial system riskier and thus, makes the whole world economy more unstable. Besides, Ocampo & Stiglitz (2008) mention that “another risk of globalization is the segmentation that it can create between those able to participate in the global financial system and those that need to rely on domestic financial sectors.” (p.51)
However, C. Fred Bergsten, another famous American economist who also made a significant contribution to the development of the economic theory, does not primarily see the destroying elements in the process of globalization. Bergsten supports the liberalization of free trade which is one of the drivers of economic globalization. “It would enhance the prosperity of all countries by underwriting the ultimate success for competitive liberalization.” (Bergsten n.d.)
To sum up all above mentioned, it should be said that the process of globalization and its influence on the economy remain a controversial problem, the debates on which will, undoubtedly, continue in the nearest future. To my mind, the study of the globalization influence should be based upon the clear distinction between economic conditions in the developed economies and the developing ones.
References
Acker, C. (2006), Rhetorical fallacies. Web.
Bergsten, C. F. n.d., Globalizing Free Trade. Web.
Globalization (2013). Web.
Ocampo, J. A., & Stiglitz, J. (2008). Capital Market Liberalization and Development , Oxford, the United Kingdom: Oxford Scholarship Online.