Introduction

Economic globalization refers to the mobility of people, capital, technology, goods and

services internationally. It is also about how integrated countries are in the global economy. It

refers to how interdependent different countries and regions have become across the world.

And according to Gao (2000) Economic globalization is defined to be the intensified

interdependency of the global economy owing to; the growth of cross border commerce and

transfer of services; international capital flows and the extensive proliferation of technologies

and it is in essence the increasing integration of world economy.

Economic globalization have past and it has a history like how it starts or how globalization

works before technologies are not yet been used and how today globalization works with the

partner of our technologies. Also globalization may have positive and negative effects, causing

expansion or bring about reduction and crisis. Due to globalization, economic development and

economic crisis are spread all over the world much easier and much quicker.
Content

Globalization is a term that has entered into widespread use. It involves processes

that are taking place simultaneously, and for a different people and different interest groups it

has a different meaning (Belgrade, 2016). The globalization goes far beyond its literal meaning

with free trade, and free cultural exchange. When it comes to economic globalization, generally

accepted definition is the increasing integration of national economies into expanding

international markets. This expansion of markets will mean that the free movement of goods,

services, labor and capital, will result in a single global market in inputs and outputs, so that,

economically speaking, there are no foreigners.

Economic integration implies integration of national economies into a global and borderless

world. This is of course a theoretical concept of free movement of goods, services, labor and

capital and a world without borders. In reality, when it comes to such a large and

comprehensive process, it is inevitable that besides benefits like it increased free trade

between nations and spread of technology. Easier and quicker transportation of people and

goods. Increases liquidity of capital Builds dependencies between countries and nations

allowing stronger trade tie. Corporations have greater flexibility to operate across borders.

Consumers get a wider variety of products to choose from, and at more competitive prices.

Companies are also able to procure inputs for producing goods and services at most competitive

prices. Companies get access to much wider markets for selling their goods and services.

Companies can use resources of different countries for efficient and lower qcost producing

goods and services. Companies get much wider opportunities for investment. Cost reduction by
eliminating cross border duties and fees and higher employment generation and income

generation. It also brings negative consequences like international bodies like the World Trade

Organization, World Bank, International Monetary Fund infringe on national and individual

sovereignty. Produces consumerism as a materialistic lifestyle that sees consumption as the

path to prosperity. Causes pollution and damages environment. Causes unemployment and less

job security. Widens the gap between rich and poor. Companies face much greater competition

and smaller companies are at a disadvantage because they do not have the resources to

compete at a global level. (Belgrade, 2016).

Edmund Burke was quoted saying, “In history, a great volume is unrolled for our

instruction, drawing the materials of future wisdom from the past errors and infirmities of

mankind.” The groundwork for the modern global economy can be linked to the transatlantic

slave trade, beginning in 1501 CE and ending in 1867 CE, which involved a conglomerate of

European, Middle Eastern, and North African countries. The major participants in the

transatlantic slave trade were France, Spain, Great Britain, Portugal, Denmark, The Netherlands,

Belgium, Sweden, Morocco, Algeria, Tunisia, Libya, Egypt, India, Arabia, and Yemen. The

Transatlantic slave system served as the foundation for many features and elements of the

modern global economy, such as the international investment of capital across international

borders resulting from commodities such as sugar, cotton, tobacco, coffee, rum, molasses, and

chocolate, all of which were harvested and produced via slave labor. The large-scale production

of these commodities literally shaped the market and developed the mentality of consumers

further empowering the banking system and global economic model seen in modern times. The

absence of compensation for labor over the course of several hundred years will build any
business of sovereign nation into an economic powerhouse. And In the eighteen hundreds in

the world economy generally, people and capital crossed borders with ease, but not goods. In

this century, people do not cross borders easily, but technologies, capital and goods do. Over

the past two to three decades, under the framework of General Agreement on Tariffs and Trade

(GATT) and World Trade Organization, economic globalization has been expanding at a much

faster pace. Countries have rapidly been cutting down trade barriers and opening up their

current accounts and capital accounts. This rapid increase in pace has occurred mainly with

advanced economies integrating with emerging ones. They have done this by means of foreign

direct investment and some cross-border immigration. They have also reduced trade barriers

( Washington Jr., 2017).

References