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The Advantages of Globalization far Outweighs its Disadvantages Essay

The term globalization has become recently popular in the modern world describing a wide range of economic, social and political trends. Globalization can be described as the integration of societies, economies and cultures through a worldwide network developed from communication, trade and transportation.

Although there are many description of the term, it has generally been accepted that globalization is a term that best describes the contemporary world that exists now. Globalization has extensive implications for almost every aspect of human life.

This has sparked numerous debates about the impacts of globalization and whether it has caused more harm than good. Considering the various developments in the recent world, it is evident that globalization offers more advantages than disadvantages economically or otherwise.

Globalization is mainly used to describe the integration of worldwide economies through foreign investments, trade and technological exchange. Globalization has led to the development of a global market whose foundation is the freedom of exchange.

Countries that were once cut off from the world can now access goods and services easily from foreign countries. Companies are also able to reduce their cost of production by locating their companies in countries with cheap labor cost. This has led to cheaper goods that can be accessed by different people from all over the world.

Globalization has also enabled the transfer of skills. Third world countries and developing countries can learn from multinational companies and in the process develop their own economies from the acquired knowledge. Critics of globalization argue that globalization has led to loss of jobs through outsourcing. Critics also argue that globalization has led to the spread of sweatshops and exploitation of workers from third world countries.

While these claims may be true, it should be noted that cases of unemployment are very high in third world countries and through globalization these workers may get a chance to get a livelihood. Companies mainly invest in these countries for cheap labor, and the moral dilemma that arises due to “unfair” wages is unfounded as without these foreign companies, the workers are stuck in poverty without a way out.

Get your 100% original paper on any topic done in as little as 3 hours Learn More Globalization has also led to integration of military power and political alliances. This has led to the development of a common international legal framework that seeks to protect human rights and promote peace throughout the world. Through globalization, crime importation has become possible and cooperation of law agencies all over the world has enabled the improvement of international crime fighting efforts.

Globalization also led to the formation of the international criminal court that has enabled political and human rights criminals to be tried fairly and justly, which would otherwise be impossible in their home countries.

Globalization has also led to military cooperation aimed at fighting impunity, promoting democracy and elimination of terrorism threats. This is one of the major advantages of globalization as countries that were once oppressed and in turmoil can now receive help from the international community. However, critics of globalization argue that it has led to the erosion of national borders and infringement of national sovereignty.

They have argued that national politics and issues that are only of national concern have been infringed upon by the international community with some countries trying to control how another country is governed or how it carries out its activities, a situation that has been dubbed neocolonialism. However, the formation of global administrative laws and other international relations law has ensured that the individual sovereignty of a country is preserved regardless of the situation.

International cooperation has also enabled countries to receive help when in need such as the case of Haiti early this year. Cases of genocide, civil wars and oppression can now be avoided or mitigated mainly due to international cooperation brought about by globalization.

During the Rwanda genocide, the international community chose not to take action and the country was almost destroyed. It was only after the international community intervened that the situation was brought under control. It can thus be seen that politically, globalization has brought more good than harm.

Infusion of cultures has also been one of the major impacts of globalization. Multiculturalism has spread to virtually all corners of the world with people enjoying better access to foreign cultures, beliefs and traditions. Some critics argue that foreign cultures have led to the extinction of local cultures.

We will write a custom Essay on The Advantages of Globalization far Outweighs its Disadvantages specifically for you! Get your first paper with 15% OFF Learn More However, it can be argued that multiculturalism has enabled better understanding between people from different regions of the world thus promoting peace. Foreign cultures are also usually secondary to local culture and although dilution of cultures may result, people gain a better understanding of the world and are more tolerant towards each other.

Globalization has also resulted in the increase of tourism and international travel. Tourism not only improves the economy of the local population but it also helps the country to educate others about its people and its resources.

Through globalization, people now have better access to education from foreign countries. Although this may lead to brain drain, those who return to their home countries bring new ideas and skills that can be used to solve problems faced by the country and improve the overall economy of the country.

Globalization has also led to the development of the international society where people communicate and solve each other’s problems. Social sites such as FaceBook have enabled people from different regions of the world to befriend each other and communicate in real time.

Globalization is a term that is used to describe the modern world. Almost every aspect of human life is in one way or another affected by globalization. Various debates have been help about the actual and potential impacts of globalization. Although it has several disadvantages, globalization has brought many advantages.

Economically, the development of the free market has been by far the most important advantage brought about by globalization. The spread of multiculturalism and better international governance have also been brought about by globalization.

Kofi Annan once said that opposing globalization is like opposing the laws of science. One of the reasons why globalization has become so influential is that it offers infinite opportunities to all. In the past, the issue of globalization was shrouded in controversy mainly due to poor regulation measures and poor understanding of the concept. However, through education and better international globalization, it has become evident that globalization is a positive force in the world.

The History of U.S. Banking Crises: Cause and Effect Report

Nursing Assignment Help According to economists a banking crisis can only be considered a banking crisis if there is a systematic panic (Calomiris, 2008, p.1). This simply means that the panic is widespread and affects national banks and a great number of people. A bank in the rural United States, failing due to problems in agriculture and the farmers unable to pay their loans is a financial problem but cannot be considered a banking crisis.

In order for an event to be considered it has to create an impact as widespread the current financial crisis of the first decade of the 21st century. In this case the systematic panic came as the mismanagement of the U.S. subprime lending sector and it has something to do with the unique structure of the U.S. banking industry.

The problem with bank losses and the ensuing panic that it creates is nothing new. Financial crisis has been documented as far back as ancient times in the financial industry of Greece and even in Rome in 33 A.D. (Calomiris, 2008, p.2). Even in other parts of Europe and in the United States banks losing money and depositors dismayed by the insolvency of banks are common occurrences. These problems may occur regularly but oftentimes these are isolated cases and its effects not given the chance to consolidate to create widespread panic.

Experts even agree that for most of modern history, banks were perceived to be stable and that large losses from failed banks are uncommon (Calomiris, 2008, p.2). But the unique structure of the U.S. banking industry is the reason why banks are now being perceived as unstable. In the past a central bank and a few policies were enough to prevent a meltdown but the American experience proves that more stringent measures should be in place.

There is also a need to point out that major financial crisis in the United States appears to be a replay of past events. The details may not be the same but there similarities such as the link between the decline of the stock prices and the panic that resulted from news that several businesses are failing.

In other words the U.S. banking industry is easily undermined by panic and there seems to be no system in place that prevents the general public from pulling down the banking sector with bank runs and other actions that multiplies the fears of the people and investors.

There is indeed a pattern that can be observed starting from the early 1900s to the 1930s and now in the 21st century. There is a replay of familiar historical phenomena (Calomiris, 2008, p.1) This means that the problem is not with the economy and U.S. industries per se but the system that was created to manage the U.S. market, banking sector and overall economy that created the opportunity for speculation, confusion, and panic.

Get your 100% original paper on any topic done in as little as 3 hours Learn More A background history of the formation of the United States will reveal the uniqueness of the U.S. Federal Government. As a result, U.S. laws are different from those that can be found in other countries. A deeper understanding of this issue can be achieved if one will compare the U.S. banking industry and the Canadian banking industry.

Before going any further it is important to point out that Canada did not experience any form of systematic panic (Calomiris, 2008, p.3). In fact, the Canadians did not see the need to establish a central bank up until 1935 (Calomiris, 2008, p.3).

The key difference is that the United States government did not allow branch banking throughout the country (Calomiris, 2008, p.3). This is not the same case with Canada. By allowing branch banking throughout the nation, the Canadian government ensured that there is geographical diversity and made it close to impossible for a negative chain-reaction of events that will trigger a system-wide panic.

There is a good explanation why the Canadians were able to create this structure and why the Americans failed to mimic an effective system of banking governance. First of all it was relatively cheaper for Canadians to establish branches nationwide. Secondly, the Canadian government was able to establish a system that made it easier for banks to coordinate with each other in times of confusion.

It has to be understood that confusion is one of the most potent force that creates fear and bank runs among depositors. Finally, the Canadian banking system encouraged the establishment of smaller-sized banks and the assets of these banks were highly concentrated in several nationwide institutions (Calomiris, 2008, p.3).

Thus, the Bank of Montreal can coordinate activities by large banks so that financial crises can be addressed without the knowledge of the general public and therefore preventing panic (Calomiris, 2008, p.3). The situation is far different in the United States.

The most significant flaw in the U.S. banking industry is that it does not allow nationwide branching of banks and this resulted in an undiversified industry compartmentalized within each state and created a system that is insulated from competition. This is the reason why it is prone to shocks.

We will write a custom Report on The History of U.S. Banking Crises: Cause and Effect specifically for you! Get your first paper with 15% OFF Learn More Whenever there is a decline in stock prices and there is news of a increase in the liabilities of failed businesses then confusion and panics will ensue (Calomiris, 2008, p.3). Although this should be expected as a regular feature of business the United States has no effective means to reduce the occurrence of a systematic panic and the negative impact that it creates.

All of the above-mentioned factors played a major role in the creation of the financial crisis of the 21st century that did not only come to impact America but the whole world. Aside from the structure of the banking industry there is another major factor that resulted in the current crisis.

It is none other than the policies that were enacted to supposedly safeguard the economy but in light of recent events it may had backfired. The most significant policy according to financial experts is the significant government protection of banks, specifically the U.S. federal deposit insurance (Calomiris, 2008, p.4). In theory the idea of having deposit insurance assuages the fears of depositors and should reduce the occurrence of bank runs. However, there are unexpected results.

There are those who argue that deposit insurance created another set of problems. Since there is the assurance that deposits are insured to certain degree then depositors will not be as vigilant as they are before when it comes to their savings. There is less incentive to monitor their banks and a result the banks will find it easier to take risks.

They know that there is a safety net that promises to lessen the impact of their fall and therefore this goads them to take bold steps to increase revenue with little regard to the impact of small mistakes that can eventually grow into something unmanageable such as what happened to the subprime lending sector.

The deposit insurance law does not encourage discipline anymore within the U.S. banking industry and therefore imprudent behavior is rewarded and no one will be held accountable. As a result there is a steady increase in the number of incompetent bankers that have tremendous capabilities to play around with funds of other people.

One small problem led to another until the banks could not hide anymore the problem with their loans and insolvency. Due to the lax environment created by the deposit insurance scheme the depositors and U.S. citizens were unable to detect the seriousness of the problem until it was already too late.

It is important to determine the impact of the deposit insurance law and why it contributed much to the failure of many American financial institutions. However, it must also be pointed out that this piece of legislature was considered of utmost necessity after the Great Depression when depositors became wary of banks. Confidence must be restored and this is the main reason why in spite of various oppositions this policy pushed through.

Not sure if you can write a paper on The History of U.S. Banking Crises: Cause and Effect by yourself? We can help you for only $16.05 $11/page Learn More It is also important to determine the possible negative consequences of the removal of deposit insurance. This is because experts are only able to identify one major reason why it must be cancelled. They are saying that it encourages the lack of accountability.

This implies that the removal of deposit insurance will automatically create the opposite attitude which is to force depositors to take a more active role in monitoring banks. Well, this is just an assumption. There is a need to determine if this will be the case or it will reproduce the dreaded financial crisis of the previous century.

Personal Inferences It is important to be familiar with the history of the U.S. banking industry and the history of financial crises that hit the country from 19th century up to the 21st century. In this manner it is possible to determine a pattern and if the pattern of negative thinking and failed actions resulted from a preceding event or policy then it is easier to pinpoint the flawed directive or piece of legislation and correct it to mitigate risks and prevent another major financial breakdown.

A historical approach will yield better results if this is achieved using comparative studies with other countries. In the study of financial crises that occurred in U.S. mainland, many insights were gleaned from comparing its financial history with that of England and Canada.

It was a revelation to know that Canada was spared from the global financial crisis that ignited from the United States and spread like wildfire to the whole world of finance. This has prompted economists to take a closer look at the explanation for Canadian stability as opposed to its neighbor.

The most glaring difference is the absence of diversity and the fact that the U.S. banking industry was set-up in such a way that it is insulated from competition and also the fact that there is no coordination between national banks to help them weather a financial storm or to become more proactive in putting out fires before even the general public even knows that a potential threat is looming.

This will prevent them from panicking that usually results in the chain-reaction of events that in turn blow-up a small problem into crisis proportions.

Decision-makers and policymakers must take heed to the fact that there seems to be a constant replay of events. There is a pattern that is easy to see if they are only willing to take a long hard look at what transpired in the U.S. banking industry from the 19th century up to the present.

It was indeed the uniqueness of the structure of the U.S. banking industry that allowed for these things to happen. If this is the case then policymakers must make increment steps to slowly but surely educate people and educate bankers on how to be more imprudent when it comes to investments as well as how to be more accountable to stakeholders.

It is also important to allow the government to make more deliberate steps in managing the banking sector. There is the assumption that if policies like deposit insurance will be removed then the general public will go out of their way to monitor banks. This is a mere assumption; the data used were the behavior of American in the early part of the 19th century.

There is no assurance that by rescinding the deposit insurance law that everyone will suddenly become more responsible citizens and more responsible bankers. It must be pointed out that banks will continually find a way to make money and it is also common knowledge that the general public is prone to fear and panic.

The federal government must find a way to balance the need for more control and the need to allow the forces of a free enterprise to dictate where the economy is heading. It is not good to have absolute control but history also tells Americans that it is not prudent to cast out all forms of monitoring and government intervention.

The best thing to do is to educate people on how the banking industry works. It is also imperative for bankers and businessmen to understand the impact of the policies of yesteryears and if there is a need to overhaul those laws considering the pattern of financial crises and the panics that occurred in two centuries of American financing.

Conclusion A historical approach to the study of the U.S. banking industry will reveal the flaws in the system. This is because a pattern is easily recognizable if one is able to see the big picture and trace the impact of policies made between the 1900s and the 21st century. It is crucial to understand that the United States continuous to suffer from a recurring problem of financial instability and systematic panics.

It has something to do with policies that were enacted in the past. There is therefore a need to review these policies and to evaluate more stringently the way the Federal government sets up the financial sector of this country. There is also a need to find the balance between close government supervision and the principles of a free enterprise.

It has been pointed out that control measure oftentimes backfire because there is no set of rules that can be created that will anticipate all future events and changes in the market and even the world. On the other hand if bankers are allowed to do their own thing then a collapse will be inevitable because they are focused on making profit not necessarily to safeguard the money entrusted to them.

References Calomiris, C. (2008) Banking Crises. The National Bureau of Economic Research.

Retrieved from https://www.nber.org/

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