A precise definition of globalization is difficult because g

A precise definition of globalization is difficult, because globalization is a process which removes economic, social and cultural boundaries of nation states. Discuss this process. Do you think that globalization is a win-win situation for all countries? You may argue in favor of or against this view.

Solution

Globalization can be referred as a process of integration of individual economies of nation states with each other. This integration does not mean that they become one country but it means that they are now more open in terms of exchange of goods and services, cultural ideas etc.

In a way, Globalization brings countries around the world closer to each other.

Globalization is a favorable preposition as it is based on premise of free trade. This enables the countries to fully exploit their comparative advantage which in turn not only leads to higher total production in the world but higher consumption as well.

Secondly, globalization enables the companies that have small domestic market to cater to much bigger world market. This enables them to take advantage of economies of scale which their small domestic market can not afford. Economies of scale by lowering their average cost of production increases their competitiveness and prfitability leading to wealth creation with in the respective country.

Free movement of capital and labor are also related aspect of Globalization. In fact, as world is becoming more and more globalized, movement of capital and labor across countries is also increasing at rapid pace.

Such movement has especially benefitted the developing countries. These countries are marred by the lack of capital and skilled labor. These deficiencies acts as bottlenecks in their growth. Globalization by encouraging free flow of capital and labor has enabled the flow of capital and skilled labor into developing countries. This has helped the developing countries to fastrack their growth process by undertaking large scale investment in creation of physical and human capital.

Thus, globalization has been a beneficial preposition for the world.