Today globalization is an integral part of the
world, especially in areas of education, culture, and economics. Globalization
has played a major role in making the world a village, as people in the U.S can
know what is happening in Japan immediately an issue occurs. The concept of
globalization has made the movement of people and goods easier from one
geographical region to another. Most of the countries and consumers have ended
up benefiting from globalization in the area of product quality, prices, cheap
labor, and technology transfer (Ching et al., 2011). This shows that
globalization plays an instrumental role in improving the quality of life as
well as enhancing economic development in many countries around the world
(Ching et al., 2011).
globalization has been of great benefits to the global economy. According to
Hirst, Thompson, and Bromley (2015), economic globalization can be defined as growing
interdependence of global economies due to rise in the amount of cross-border
trading of services and commodities, capital flow internationally, as well as
rapid and wide technology spread. Therefore, globalization in the area of
economy is concerned with flow of factors of production, such as labor, capital
and technology from one region to another, making access of goods and services
easier for the majority of the people, whom would otherwise not access the same
in a world which is not globalized (Hirst, Thompson and Bromley, 2015). Some
theories have been developed by different theorists with an objective of
explaining the concept of economic globalization. The main theorists in the
area of globalization include Castells, Stiglitz, and Bhagwati. These theorists
touch on the issue of globalization regarding the state, social change, social
order, social justice, the market, free trade, and other critical economic
themes. However, there are theorists who give an accurate as well as persuasive
explanations concerning globalization. This paper argues that Bhagwati ideas
provide us with a better comprehension of globalization than Stiglitz and
Castells ideas on globalization.
Different arguments concerning the concept of
the free market have been developed by different economists. The free market is
the fundamental element of globalization. A free market is a form of economic
system where prices of goods or services are determined by competitive forces,
such as demand and supply without government interference through regulations.
However, there are different schools of thoughts in the area of economy
concerning the free market concept. From Keynes point of view the idea of the
free market cannot apply effectively to an economy as it creates some
instability in prices, thus advocates for government intervention as the basis
of dealing some forms of instability in an economy. On the other hand, Adam
Smith advocated for free market by pointing out that government should allow
forces of demand and supply to determine prices of services and goods within an
economy. Apart from the general economic points of views concerning free
market, when it comes to globalization, there are those who support
globalization from a free market view, and others are strongly opposed to it.
to Bhagwati argues that removal of barriers to trade in an economy is
beneficial to an economy and its people. Bhagwati notes that free market
facilitates globalization of an economy and this result in the improvement of
the overall quality of life for the people (Bhagwati, 2004). Bhagwati indicates that free market
enhances economic growth in the economy, through facilitating free movement of
labor and goods within an economy. The free movement of goods and services in
an economy result in the reduction in child labor helps in bridging the income
gap between women and men in the workplace and reduce levels of poverty in an
economy (Heilbroner and Milberg, 2012).
For example Bhagwati indicates that globalization, which is a concept of free
economy allows more investments in economy, which in turn results in many jobs
opportunities being created and this ensure most of the people within an
economy has a source of economy, thereby improving their standards of living in
the long run (Bhagwati, 2004). Bhagwati main arguments are that free market is
good in facilitating economic and social growth in a nation, leading to an
overall improvement in quality and standards of living of the people.
Stiglitz is strongly opposed to the idea of free market. Stiglitz believes that
free market concept does not work, but rather creates more economic problems
than benefits (Stiglitz, 2006).
Stiglitz is therefore opposed to the idea of free trade within an economy. The
free-market concept cannot work effectively, given that market are inefficient;
hence the flow of information is asymmetric. This means that flow of
information which is instrumental in facilitating the determination of prices
of services and goods is imperfect. Stiglitz strongly advocates for government
intervention in an economy as the basis of dealing with various problems that
are presented with market imperfection. Therefore, Stiglitz tries to show that
globalization does not benefit the majority of the people, and in some
instances it has to come with interventions aimed at protecting the interest of
the poor, such as regulating the free flow of goods, which in turn might be a
threat to the survival of local industries, which are a major source of income
for the poor. According to Stiglitz the financial crisis in 2008 occurred due
to the poor free market concept, whereby, the government failed to intervene
through its policies but allowed forces of the market to determine the movement
in the housing market, leading to collapse of many financial institutions and
other sectors of the economy.
the other hand, Castells points out that the concept of free market is being
advanced through the creation of the network societies. Castells indicates that
the internet creates free market, whereby, people from different parts of the
world can share information and ideas on different issues, such as service
provision. Castells argument is that network society a new ideology of free
market that might benefit people or not depending on the way the ideology is
exploited (Castells, Caraça and
Cardoso, 2012). The network society creates alternative economic
cultures in the world. The every changing environment according to Castells
leads to people advocating for more political space and failure of any
government to give people free space leads of many societies (Rhodes-Purdy, 2015). This
argument indicates that the idea of a free market in a network society might
end up not working effectively to those societies that are not receptive to
change, as it will eventually lead to their collapse.
The argument presented by Bhagwati on the
concept of free market and globalization is strong compared to what is provided
by Stiglitz and Castells. Bhagwati argument on the free market is clear and
persuasive in nature. The argument shows that the ideology of globalization by
free trade is beneficial to the people. The argument shows that free market
concept benefits usually outweigh the costs that are associated with the
allowing free trade within an economy. For example, the explanation of free
market and its impact on child labor, which is one of the bases of Stiglitz
opposing globalization, is very persuasive in nature. The argument indicates
that globalization results in the creation of many factories in an economy, and
this makes parent generate higher income and as a result reduce chances of
children being away from school to work as laborers, as a parent can earn
enough by working in new industries and business in an economy. This argument
is powerful and makes Bhagwati concepts of free market easier to understand
than what is provided by Stiglitz and Castells.
State plays an important role when it comes to
the economic development of any given nation. Different economics have provided
different arguments concerning the role of state when it comes to the economic
development of a nation. According to Keynes, a state has a role to play in
determining economic policies to be used in bringing stability. Keynes
advocates for the state interventions using monetary policies, such as a change
in interest rates with the aim of controlling inflation and employment growth
(Keynes, 1924). Alternatively, Adam as an economist advocates for the state to
be only involved in creating a good business environment to facilitate trade
and economic development. Adam Smith as an economist was opposed to direct
intervention of the government on an economy, such as through economic
policies, such as import duties, as they hinder the free flow of goods and
services. Various theorists of globalization also provide ex-explanations
concerning the role of state when it comes to dealing with issues of globalization.
(2004) points out that a state should not interfere with globalization, but
should allow free trade. The state should only put in place measures that
facilitate in creating a good business environment rather than interfering
directly in economic policies, such as the implementation of policies that make
it impossible for the free flow of services and goods. The role of the state is
to make the process of globalization easier within an economy by passing
regulations that do not restrict the flow of new technologies within an economy (Heilbroner and Milberg, 2012). The
role of the state is to make sure that trade policies facilitate movement of
goods and services, but do not act as impediments to globalization (Heilbroner and Milberg, 2012).
Bhagwati argument is that the government should not try in a way to control
globalization in an economy as it is more beneficial to the people, in the area
of job creation and improvement of the quality and standards of living (Hirst, Thompson and Bromley, 2015).
Stiglitz, on the other hand, is of the view
that the state should be directly involved in dealing with economic issues,
such as globalization. Stiglitz is the view that government interventions are
essential with the aim of protecting customers from imperfect market movements
(Stiglitz, 2006). The
government has a legal obligation of putting in place measures aimed at
protecting customers and citizens from inefficiencies in the market. For
example, in the market local industries may not be at the same competitive
level with foreign companies, therefore, allowing globalization in this context
would result in killing of the local industries, and the only solution would be
for the government to put in place economic interventions aimed at protecting
the local industries by making foreign exports expensive in the local market,
such as import duties and others. This shows that Stiglitz is a believer that
globalization should be controlled by the government through implementation of
economic policies that aim at protecting certain aspects of the local economy
from being hurt by allowing free entry of good as well as services.
Moreover, Castells provides a similar argument
from with Stiglitz concerning the role of the state as far as globalization is
concerned. Given that Castells is of the view that the economy is changing due
to the creation of the network societies through the internet, he indicates
that government interventions are critical in making the network societies
stable. Castells is the view that the state has to come up with policies that facilitate
political change within an economy so as to make an economy beneficial to the
people (Hirst, Thompson and Bromley, 2015). For example, the government has to
intervene and implement economic policies that facilitate the adoption of every
changing environment in a network society, failure to which it can result in
The argument by Bhagwati concerning state and
globalization is strong. It shows that the role of the state is to facilitate
the process of globalization to benefit the society. However, the arguments
provided by Stiglitz and Castells seem to be vague, as they seem to advocate
for direct government intervention, an indication that they do not agree with
the concept of globalization.
Social order is state of having a society is
stable. The stability of the society is essential when it comes to economic
growth as well as development. Keynes one of the renowned economists believes
that governments' interventions with an economy are essential when it comes to
trying to address social problems. However, Adam Smith believes that
governments should not interfere with working on an economy as economic and
market forces will end up working on their own leading to solving of social
disorder, such as high cost of living.
Bhagwati indicates that social order is
realized by society through globalization. Bhagwati (2004) indicates that
globalization makes it possible to bring social stability within an economy
through addressing social challenges, such as gender inequality, child labor,
and others. For example, globalization helps in bridging the income between the
men and women in an economy, something that ends up facilitating the process of
ending income gaps as far as gender is concerned (Bhagwati, 2004). Globalization
helps in bringing social stability in the society by improving the social
well-being of the majority of the people.
the other hand, Castells argues globalization creates a network society which
can create social instability within an economy. Castells indicates that social
networks have resulted in the world spread of economic crisis, as social
networks are used to spread panic in an economy. The creation of alternative
society through globalization, which is more of network societies that
traditional societies, creates social challenges that are difficult to be
managed by the government unless it put in place measures of adapting to the
changing social environment (Castells,
Caraça and Cardoso, 2012).
Alternatively, Stiglitz strongly
opposes the idea of globalization by social disorder. Stiglitz (2012) argues
that allowing globalization within a society creates social inequality, which
is one of the major disorders that many economies around the world are trying
to address. Stiglitz indicates that failure of the government to intervene with
policies that allows the process of globalization to be controlled in nature
leads to creation of social problems, such as high unemployment levels arising
from collapse of the local industries due to failure of the government to
protect them from unfair competition arising from the international companies
(Stiglitz, 2006). This argument tries to show that globalization that is
unregulated by the government is not beneficial to the society as it creates
more social problems, such as high crime rates, unemployment. Therefore,
Stiglitz is of the view that in order to social inequality to be addressed in a
society it is appropriate for the government to put in place measures aimed at
controlling some aspects of globalization so that they can be adopted slowly so
as to avoid creation of social disorders within an economy (Stiglitz, 2006).
Overcoming income inequalities in the society can only be achieved by controlling
some aspects of globalization that leads to only a small part of the society
becoming richer, while the biggest numbers of people become poorer (Piketty and
The argument provided by Bhagwati concerning
social order persuades one to believe that globalization aids in addressing
some of the social problems in the society. It shows that globalization
facilitates economic growth, which is essential in dealing with gender
inequality and child labor (Bhagwati, 2004). The argument provided by Castells
and Stiglitz seems to be less convincing as they fail to indicates how social
order can be impacted in a great way by globalization, especially negatively,
as their arguments somehow advocate for globalization in the society.
The three main arguments presented in this
essay indicates that Bhagwati arguments on globalization appear to be more
persuasive and clear in nature compared to what is provided by Castells and
Stiglitz. The first focus of the arguments was in line with the free market.
The argument provided by Bhagwati is that free market is a good component as it
makes globalization beneficial to an economy regarding creating economic and
social opportunities that help in dealing with child labor and gender
inequalities (Bhagwati, 2004). The counter argument provided by Stiglitz is
that free trade is not a good ideology at all as it makes globalization to
benefit a small fraction of people in the society while making the majority
poor (Stiglitz, 2006). The argument provided by Castells is that free market
concept in a globalized world creates a network society, which unless
controlled can result in social problems.
When it comes to social disorder, Bhagwati
argues that globalization helps in addressing social disorder in the society,
through creating opportunities that cannot be found in a society which is not
globalized (Bhagwati, 2004). Nonetheless, Stiglitz is opposed to the idea that
uncontrolled globalization helps in solving social problems in the society, but
view globalization as the basis of creating social disorder within the society
through the killing of local industries. Stiglitz tries to shows that collapse
of economies in Eastern Asia in 1997 was mainly due to uncontrolled
globalization. On the other hand, Castells shows that emergence of network
society due to globalization results in the emergence of a new set of demands
in the society leading to social instability.
The last arguments are about the concept of
state. Stiglitz argument is that state should be actively involved in
controlling globalization (Stiglitz, 2006). On the other hand, Bhagwati is of
the view that globalization should not be controlled by the government, but
Castells holds that globalization in some aspects some be regulated internally by
The main argument of the essay is that
Bhagwati explanations on globalization are better compared to one provided by
Castells and Stiglitz. Bhagwati arguments are obvious on the idea of
globalization, especially on its impact on social order, stand on free market
and role of the state. It shows that globalization is beneficial and best work
within a free market economy (Hirst,
Thompson and Bromley, 2015). It shows that the role of the state should
be to facilitate economic activities, rather than trying to control them as it
is advocated by Stiglitz and Castells.
is recommendable in the future that the idea globalization to be explained from
the perspective of Bhagwati arguments as they are more clear and persuasive
naturally in comparison to what is provided by Castells and Stiglitz. In
conclusion, it is important for further research to be carried out on the
concepts network society as discussed by Castells so as to understand how it
influences the process of globalization in the modern society.
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