Effect of Economic Globalisation on the Probability of War

Economic globalization and economic integration reduce the probability of conflict and war. Do you agree or disagree with this assertion?

The points that I hold in this essay do not agree with the argument presented in title, tough it is admitted that economic globalization and integration do bring about significant benefits to the whole world development. Some economists believe that economic globalization is a good thing since it has brought a great deal of material well-being, and can lead to a enjoyable life. However, in addition many economists are skeptical. They pointed out that if economic globalization is really so good, why the international economy is still so confusing? Theorists and public opinions carry out a fierce discussion regarding this issue. This paper briefly comments about the cons and pros surrounding economic globalization issues, and seek appropriate interpretations to explain why this paper disagrees about the point that economic globalization and integration can deduce the probability of conflict and war through listing reliable and adaptable arguments with supported evidences (Bermeo, 2009).

Basically there are two views about what is economic globalization: one is that the essence of economic globalization is the capitalist production mode and the global exploitation, the second is that economic globalization is the dominance of the market economy, production factors, economic and technical resources are free to flow and get optimized allocation on a global scale. Economic globalization is a historical process: on the one hand all countries in the world are intertwined, mutual influent and integrate into a unified whole which is unified global market; on the other hand is to establish a standardized global rules of economic behavior in the world wide as a basis for the build of global economic operation mechanism. In the process, the economy has dominated market, production factors are free to flow and optimized allocated on a global scale (Birdsall, 2010). So it is saying that economic globalization refers to the production factors running across borders and fell flow of worldwide, and nations and regions all over the world integrated as a historical process.

Economic globalization is a historical category emerged with the growth of the world market. Therefore, the fundamental premise of economic globalization is a global unified market. The economic exchanges and trade liberalization between countries are not economic globalization under the situation that global market is in segmentation. Only the world market formed on the basis of the extensive division of labor between countries, it means the fundamentally eliminating the isolated developing state among countries and ultimately form a broad and profound economic ties. Any country or region once integrated into the world economy are bound by a variety of influences from the world market. Since the 1980s, especially in the 1990s, socialist countries taking china as the representative has transferred into market economy through insisting on deepening reform on the basic system of socialism. The traditional planned economy gradually disappeared, and market economy has dominated the world, the national and regional limitations have been broken due to the economic competition and market profit-driven behavior, and the world economy is increasingly linked to a global economy as a whole. At the same time, regional economic is developing rapidly as a form of regional economic integration organization. By the end of 1996, there are more than 100 regional economic groupings all over the world including almost all of the country. EU, NAFTA and APEC has become the main tripolar world economy, and its total economic output and export have achieved 80% of the world. And in recent years, regional economic blocs are continuously interwoven, and the regional markets continue to extend beyond boundaries outward and work on mutual integration, greatly promoting the development of national economic integration and globalization, forming a huge market economic operation system. In this system, the barriers on cooperation reduced, and the penetration and dependency degree is increasing that different countries can benefit from sharing the best allocation of resources brought by production resources flowing freely, but at the same time these countries have to bear possible risks that economic integration brought to them. National economy and culture have exceeded state and national boundaries developing from opposition and collision toward the penetration and fusion with the deepening of the international division of labor and no frontiers economy expanding.

It should be acknowledged that the process of globalization of the world economy has just started, the impact of it to national economies and the world economy is still difficult to predict, but one thing is very clear that economic globalization is a “double-edged sword” (Bernard, 2001). Economic globalization can indeed promote the improvement and expansion of the world’s industrial economies of scale, will cause changes in production and consumption technologies. However at the same time, economic globalization will have some negative effects and these effects are different according to specific areas and specific countries with different policy options. Specifically, the pros and cons of economic globalization as follows:

The positive effects of economic globalization:

Economic globalization allows the effective and rational allocation of labor, worldwide capital, technology, products, markets, and resources. The competition between countries get intensified with economic globalization effectively promoting international cooperation. From the economy perspective, the reasons for competition on due to the limited resources and the expansion of capital; from the politic perspective is due to the existence of the state, countries are trying to enhance their own strength to realize their dependence on other countries thereby benefiting more with lower cost. Economic globalization has accelerated the free flow of factors of production on a global scale, and the formation of a unified global market thus promoting the operation of multinational globalization and global adjustment of industrial structure, and to maximize the optimal allocation of resources.

The economic globalization helps to reduce international conflicts. In the process of economic globalization, most of the world countries are involved in a deeper level of international division of labor, the investment and technology transferring activities of transnational corporation contributes to the closer link of production operation regarding sales, research and development. And a direct result from this operation is the interdependence of national economies, the degree of mutual penetration deepened. The changes in economic relations inevitably lead to changes in the political sphere and international relations changes, and negotiation and dialogue increasingly becoming the primary means of dealing with international relations in today. Strengthen trust and cooperation between countries, bounding international conflict or at least reducing the intensity of the conflict has gradually become a trend. And some experts believe that the trend will be increasingly strengthened with further development of economic globalization.

While the cons that economic globalization has brought to us cannot be ignored:

Economic globalization has exacerbated the imbalance in the world economy, so that the gap between rich and poor is widening. Firstly the economic globalization has brought is the impact on the national economy of developing countries, and this impact is built on the basis of unequal relations. On the one hand, international economic organizations are in the hands of developed countries, and principles, systems and orderly functioning of the world economy are developed by them. On the other hand, the Western countries have economic, technical and management advantages, and the developing countries cannot be far way. Thus the greatest benefit from economic globalization belongs to the highly developed countries. Despite the developing countries with relative backwardness technology and economy will get some long-term benefits, but it is difficult for them to benefit in the near future or a long time, and may even suffer great damage and shocks, such as losses or the closure of many national enterprises, etc (Kenneth, 2012).

While economic globalization can lead to increased global objective material wealth , but in the course of the market , the competition is the primary law , it is in the creation of high- efficiency, will inevitably lead to wealth is increasingly concentrated to a small number of countries or interest groups , resulting in widen the wealth gap . According to World Bank statistic, the per capita GDP 1983 high-income countries is 43 times the low-income developing countries, to become 62 times in 1994, even more unfair social distribution. Specific reasons for this disparity are many, there are institutional reasons, the reasons for market reasons, such as changes in the structure and, but there are two factors are obvious: the distribution of benefits of economic globalization is not balanced; market competition makes Some social policy challenges (Foreign Affairs, 2012).

Economic globalization has strengthened the instability of the world economy.

Economic globalization has made economic links with countries in the world economy more closely, national domestic economic stability will depend not only on their domestic factors, to a greater extent by the tremendous impact of international factors. With the continuous expansion of international trade and trade in services, in particular economic conditions in other countries, major trading partners such as inflation , the financial crisis will affect the national economy through the international transmission mechanism (Ikenberry, 1990). If the country’s economic structure, there are some similar problems, these economic fluctuations will inevitably occur in the country. Even if the national economy is not a problem, because a certain degree of fluctuation will be leaving the role of psychological factors in the economy occurred. Especially for developing countries because of economic globalization is financial, the globalization of trade and investment, however, due to the insufficient growth in developing markets, the economic structure is more fragile and more vulnerable to adverse external factors ; and because of incomplete legislation in developing countries , to facilitate speculation ; then coupled with lax enforcement in developing countries , abiding by the law , giving the ” hot money ” leaving an opportunity. Thus, a large number of Western countries impact the hot money from time to time financial markets in developing countries, and even lead to the financial crisis, resulting in as war -like destruction. Economic globalization has developed economic cycles, exchange rates, changes in interest rates transfer to developing countries to enable developing economies often unfavorable fluctuations occurred in the Mexican financial crisis in late 1994 and the 1997 Asian financial crisis has fully demonstrated this point.

Reference:

Bermeo, N. (2009). Does Electoral Democracy boost Economic Equality? Journal of Democracy, Volume 20, Number 4, October 2009, pp. 21-35

Bernard, L. (2001). The revolt of Islam. The New Yorker. 77. 36 (Nov 12, 2001): 050.

Birdsall, N. (2010). Life is Unfair: Inequality in the World. Foreign Policy, No.111 (Summer, 1998), pp. 76-93.

Ikenberry, G.J. (1990). Creating Yesterday’s New World Order: Keynesian “New Thinking” and the Anglo-American Postwar Settlement.

Foreign Affairs. (2012). Time to Attract Iran: Why a Strike Is the Least Bad Option. Foreign Affairs. 91.1. (Jan/Feb 2012):76-86.

Kenneth, W. (2012). Why Iran Should Get the Bomb: Nuclear Balancing Would Mean Stability. Foreign Affairs. 91.4. (Jul/Aug 2012): 2-5