The Market as a Social Institution

The Market as a Social Institution

Question

Discuss the positive and the negative impacts of globalisation.

Answer

I. The positive impacts of globalisation.

(i) This process is based on the basic premise of free market. It is presumed that the free market begets competition and increase efficiency which is lacking in controlled markets.

(ii) Foreign investment flows into the domestic economy and domestic economy becomes strong and boisterous.

(iii) Globalisation guarantees increased employment opportunities. It is a great blessing for those countries having very large popular Eg. China and India.

(iv) It would take care of the issues of social justice because it ensures economic development through the integration of economies of the world.

(v) It will provide a safety net for the diadvantaged groups.

(vi) It increases cooperation and solidarity among business partners at the international level.

(vii) Values of reciprocity and solidarity among nations are supposed to usher in an era of world peace and amity.

(viii) It is opening many opportunities for millions of people around the world. United Nations Study, 2004 suggests that it offers enormous potential to eradicate poverty in the twenty first century.

II. The Negative Impacts of Globalisation

(i) It has given rise to serious risks for third world countries because most of them are not competitive at international level. Owing to this gains of economic growth are not evenly distributed among different countries.

(ii) Open competitive markets are pushing the world towards unsustainable levels of inequality.

(iii) Globalisation has increased the pace of labour mobilization towards the western countries and their old parents are feeling insecure in India Similarly, rural people are moving to big cities resulting collapses in civil sanitation and order there and that of the extended families. Money has skipped off sentiments.

(iv)    The structural adjustment policies imposed by IMF and World Bank in Asia, Africa and South Pacific (i.e. third world countries) are disastrous as these have decreased the access to education, health and nutrition to the underprivileged sections of the population. These institutions create the political and legal conditions for global market.

(v)    As benefits of growth are unevenly distributed, the number of people living in poverty fell in mid-1990s but then began to rise again in almost all countries. In the developing countries, the rich can adjust easily to the new environment but the poor are becoming poorer.

(vi) Globalisation has made MNCs the big player of the market because they have capital in abundance. Such a concentration of economic power leads to convenience of political and social power.

(vii) Globalisation curtails social and economic right of common citizens. It adversely effects social policy and reduces the role of state activities for the benefits of welfare of the common people.

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