How globalisation can have different impacts on various groups within Essay

How globalisation can have different impacts on various groups within the same country - Essay Example How globalisation can have different impacts on various groups within the same country? Improved transport and communication has facilitated trade between countries turning the world into a global village prompting a lot of debate with proponents arguing that globalization is essential for economic growth and elimination of poverty while opponents argue that globalization is undermining the role of the state hence eliminating sovereignty of nations. He argues that the advancement in technology enables suppliers in one part of the globe to satisfy the demands of consumers in other parts of the globe thus increasing the magnitude of globalization. Boyes & Melvin view globalization as increase in cross-border flow of goods and services, and increased mobility of technology, information and individuals. According to Lerman & Schmidt, globalization is not a new phenomenon but has been in existence since the First World War but has increased in speed and intensity in recent past. It leads to convergence of nations politically, economically, socially and culturally. It is char acterized by increased international trade, foreign direct investments, capital flows, migration of population, and flow of knowledge. It has led to overdependence among nations especially poor countries dependence on rich nations. Globalization has opened doors to trade by removing barriers resulting in a lot of competition in domestic markets and providing opportunities for firms to expand into the global arena. There are also increased mergers and acquisitions as competition increases as well as establishment of multinational companies. Globalization has also been in the lime light as the cause of the recent financial crisis due to integration of financial markets and increasing ineffectiveness of the monetary and fiscal policy. Many anti-globalization campaigns have been on the rise as it is argued that it enhances income inequalities and unemployment (Ehrenberg, 1994). The paper discusses the effects of globalization on various groups in USA. Globalization in USA USA is conside red as the most globalized nation. It is a capitalistic state or free market economy and hence governed by the forces of demand and supply and open to competition from all quarters nationally and internationally. The value of foreign trade in USA continues to rise as the effects are felt everywhere especially the less developed countries. For example, the value of merchandise exports 1950 was 4% of gross domestic product (GDP) same as that of merchandise imports. Recently the value of merchandise exports is 8% of GDP while that of imports is 11% of GDP. The exchange of services which was not common in 1950s is now in existence enhanced by improvement in information technology. Outsourcing in 1960 accounted for only 1.7% of the value of services produced in USA and sold to foreigners but by 1997 it had risen to 5.1% showing how globalization is extending at fast pace (Boudreaux, 2008: 8). Deregulation of the financial sector is another phenomenon in USA. The financial sector has thus increased in fragility leading to financial instability and vulnerability to external shocks. The deregulation of banking industry has partly been blamed for the current global financial crisis. The banks engaged in sub prime mortgages and securitization of the mortgages without a limit leading to collapse of the institutions as a result of bursting of the housing bubble. This effect was transmitted to other parts of the economy and the world as a whole through integration of world financial markets (Brewer & Boyd, 2000). According to Pryor (2000), there is a change in the location of trade transactions in the USA from business people to multinational companies. He alleges that