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The processes of polarization of the world economy into a wealthy minority and a poor majority are proceeding at an accelerated pace. Simultaneously, per capita incomes in the most prosperous countries are growing significantly faster than in the poorest. As a result, the gap in the levels of socio-economic and scientific-technical development between the countries of the center and the periphery is widening (Goryakin et al. 73). The purpose of this paper is to discuss the impact of globalization on countries of the first and third worlds. Despite all the advantages of globalization, it causes an unfair distribution of goods, which creates the threat of conflict at various levels.
Primarily, the modern processes of globalization are useful for developed countries. Globalization strengthens their position in the world economy and gives them multiple advantages. In addition, globalization processes within the new international labor division threaten to aggravate the current state of third-world countries (Petricevic and Teece 1501). They, being forced to follow the proposed neoliberal path and play by the rules developed without their participation, become objects rather than globalization subjects.
One of the critical processes in the global economic development of the 21st century is progressive globalization. Researchers state that globalization “is a complex admixture of different, though interrelated, historically evolving developments and transformations —economic, technological, cultural and social” (Martin et al. 5). The attitude to globalization in business and academic circles is ambiguous. Some see it as a threat to the world economy; others evaluate it as a means of further progressive development. Globalization is a process by which interdependence between countries is increasing due to an increase in foreign economic transactions. As a result, a new international division of labor arises, in which the production of GDP and the accumulation of national wealth increasingly depend on the economic entities of other countries. It is also worth noting the increasing interdependence of the economies of various countries of the world. It is a consequence of the cross-border movements of goods and services, the migration of capital and labor, and the intensive exchange of information and technologies.
The development of modern telecommunication technologies has led to the formation of global information networks. As a result, the spatial and geographical factor is mostly losing their significance, and the world economy is turning into a joint system. The globalization benefits are not distributed evenly: this process primarily benefits developed countries, while most developing countries lose. This increases the threat of conflict at the regional, national, and international levels. For instance, low-income countries fight for resources, and these wars can last for years, although people could unite and solve their problems together. Globalization has also generated a differentiation of the world into countries that receive good and bad results from globalization.
The growing gap in the level of well-being leads to, an increase in unemployment and impoverishment of the population in third-world countries. The globalization of past years has exacerbated the problems that impede their integration into the world economic relations system and solution to poverty and underdevelopment. There are several significant problems that arise in developing countries. These are, for example, low and unstable incomes, depending on the situation on world markets. The growth of socio-economic stratification in the part of the population, the loss of traditional principles and values, and the growth of external debt are also critical consequences (Petricevic and Teece 1492). All this ultimately leads to a massive displacement of the population from developing countries to developed ones.
In the context of globalization, it is essential to mention the current divergence of the world. This is an increase in income differentiation between first-world and third-world countries, with a general rise in the number and proportion of the poorest part of the world’s population. Researchers note that “social and cultural globalization, involving cross-border movement of cultures and openness of media, may also have increased a population’s perception of the supposed benefits of foreign lifestyles” (Goryakin et al. 68). As for the positive impact of globalization, it is easier to feel for developed countries. They can reduce costs by transferring technologically dirty industries to third-world countries and hiring people with lower salaries.
A substantial side effect of globalization for developing countries may be a technological lag behind developed countries. It will subsequently lead to even greater impoverishment of the people and the polarization of society. No less a threat to the national economy is TNCs. They impede the implementation of a nationally oriented policy, which could contribute to the economic stability and the well-being of the population. On the one hand, by connecting to the international production networks of TNCs, developing countries are gaining additional opportunities for industrial growth (Martin et al. 8). They also can follow the experience of developed countries and speed up the growth process. On the other hand, external outsourcing, as a rule, is not accompanied by the transfer of significant technological innovations to developing countries.
However, developed countries also cannot avoid the adverse effects of the economic process. One of them is the increase in unemployment due to the appearance of cheap low-skilled labor (migrants) on the national market. Prerequisites for unemployment are also new technologies that reduce the dependence of production processes on humans and the transfer of part of the production cycle to other countries (Chen et al. 318). Thus, more attention should be paid to the creation of new workplaces and adequate working conditions.
Different aspects of globalization are considered not only by sociologists or politicians but also by writers. A striking example of a work on this subject is Prologue: The Super-Story of Thomas L. Friedman. According to Friedman, globalization is “the inexorable integration of markets, transportation systems, and communication systems to a degree never witnessed before” (Friedman 2). This work as a whole is a relatively complete and clear description of the system established globally and has a certain optimism concerning its future. With the right approach, each global system can work as a whole and control most political, economic, and social processes of the world. However, despite the pros, people still do not know how to correctly deal with globalization, leading to a large number of mistakes and injustices.
Barbara Ehrenreich and Annette Fuentes write about globalization in Life on the Global Assembly Line. They describe the lives of people from third-world countries who are forced to work for little money, making products for successful people. Women who work in factories in Malaysia or the Philippines live under challenging conditions and experience many inconveniences (Ehrenreich and Fuentes 50). Moreover, most of the world’s wealth is concentrated in such major countries as America. This is one of the biggest problems of globalization, which, undoubtedly, must be eradicated by all possible means.
Jared Diamond pays attention to globalization in the work Globalization Rocked the Ancient World Too and looks at this issue from a historical perspective. Diamond claims that “the first wave of globalization began around 8500 BC, driven primarily by genetically modified foods created in the Mideast and China, and to a lesser extent Mexico, the Andes, and Nigeria” (Diamond 15). This exchange of goods led to inevitable changes in social and political relations. This was partly beneficial, as it allowed some people to earn money, and others to get specific products without difficulty. However, with increasing scale, globalization has led to problems that can be observed today, such as unemployment and ecological issues.
Another example of a piece on the private aspects of globalization is It’s a Mall World After All by Mac Margolis. The author describes how strongly commerce is developed in the present world and what consequences this leads to. Indeed, modern society is based on consumption, so malls are one of the best ways to make money. On the one hand, their creation leads to the technological and social development of first-world countries. On the other hand, they require significant production which, for instance, pollutes and destroys nature (Margolis 25). Therefore, their construction and management should be treated carefully to avoid a harmful impact on the environment.
Thus, the foremost modern problem is not the process of globalization itself, but how it is managed. A potential solution is a joint work of developed and developing countries aimed at the creation of social, financial, and political balance in the world. If people do not change the policy for managing this process, all parties will feel the adverse effects of globalization. Developing countries will have low living standards, and developed countries will deal with the appearance on the national market of cheap low-skilled labor from developing countries. Thus, each country’s leaders should be attentive to the process of globalization and control it so as not to harm society.
Chen, Sylvia Xiaohua, et al. “Conceptualizing Psychological Processes in Response to Globalization: Components, Antecedents, and Consequences of Global Orientations.” Journal of Personality and Social Psychology, vol. 110, no. 2, 2016, pp. 302-331.
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Diamond, Jared. “Globalization Rocked the Ancient World Too.” Los Angeles Times, 14 Sep. 2003, pp. 15-20.
Ehrenreich, Barbara, and Annette Fuentes. “Life on the Global Assembly Line.” Ms. Magazine, Spring 2002, pp. 47-60.
Friedman, Thomas L. “Prologue: The Super-Story.” Longitudes and Attitudes: The World in an Age of Terrorism, Farrar, Straus and Giroux, 2002, pp. 2-8.
Goryakin, Yevgeniy et al. “The Impact of Economic, Political and Social Globalization on Overweight and Obesity in the 56 Low and Middle Income Countries.” Social Science & Medicine, vol. 133, 2015, pp. 67-76.
Margolis, Mac. “It’s a Mall World After All.” Newsweek, 5 Dec. 2005, pp. 21-26.
Martin, Ron, et al. “Globalization at a Critical Conjuncture?” Cambridge Journal of Regions, Economy and Society, vol. 11, no, 1, 2018, pp. 3-16.
Petricevic, Olga, and David J. Teece. “The Structural Reshaping of Globalization: Implications for Strategic Sectors, Profiting from Innovation, and the Multinational Enterprise.” Journal of International Business Studies, vol. 50, 2019, pp. 1487–1512.