The economics of globalization and war

Theeconomics of globalization and war

Theeconomics results of globalization and its role in promoting war is atopic of interest in for various scholars. They have various theoriesthat explain globalization from its inception and its implicationsfor the world economy. Globalization and economic development are twoinseparable concepts because they affect each other directly.Globalization leads to economic prosperity. War comes in as the otherconcept that relates to globalization and economics. The causes ofwar largely incline to the two concepts. Though there are varioustheories that explain the economic cues of war, they boil down toeconomic power and globalization. This paper will try to discuss theeconomics of globalization and eh economic causes of war by drawingits conclusions from various theories and historical contexts.

Globalizationis one f the most discussed topics in the world. The search enginein Google brings millions of sites with the name in a fraction of asecond. However, most of these sites provided very varied definitionsof the term, and it becomes even difficult t settle down the termthat makes sense in the context of the modern world. From the momentthe world started to become a village, many people flawed thecontribution of the world super powers. They saw it as a methoddevised by them to control the rest of the world. Globalization hencereceived definitions like “The Americanization of the World”among others (Boudreaux, 2008, p.1).

Itappeared as a way to use the strong economic and military powers tocontrol the world. Some institutions like the WTO and IMF becamecenters where critics pointed fingers at thinking that they played animportant role in giving America control, over the world. Carnegieoffers a clear and an objective definition of globalization.According to him, “Globalization is a process of interaction andintegration among people, companies or governments being facilitatedby advancements s in technology in both transport and communication”(Boudreaux, 2008, p.1).

Someof the entities in the world use the term well while others use toexploit others. Globalization is a platform that has broughtcountries together to negotiate trade and remove the barriers thatrestrict movements from one place to another. Those who takeadvantage to exploit others look forward to gaining control over thedisenfranchised states and develop a form of economic control overthem. As a way of appreciating the world as a global village, peopleshare problems, and they help each other on the global arena. Forexample, singer Bono used the platform to raise money to help theAfrican poor. Some other musicians in America have also come togetheron several occasions to raise money to help the poor and afflicted inAfrica and Haiti. Such moves are intentional, and they have a knownobjective.

Otheractivities that take place due to globalization occur as a dictationof the circumstances that exist in the world economy. For example,some countries produce better goods than the ones produced locally.For this reason, the citizens buy the goods from different countries.A good example is the consumer behavior of the residents in Kansas.They have a habit of exporting cars from Japan that are better andcheaper than the ones produced in Detroit (Boudreaux, 2008, p.1).

Globalizationhas a direct effect on the world economy that trickles down to theeconomic environment of individual countries. First, due to the heincreased production and movement of goods it leads to a lot ofcompletion. Firms with international interests compete for shares inthe market with other companies. They have to provide goods that meetthe demands if the consumer for them to remain relevant in themarket. The effects do not leave the local forms behind. They arealways on their toes to keep a significant share of the local marketdue to the threat of the international companies. The final advantagerests with the final consumer who enjoys modest prices and quality ofgoods. Going back to the consumer behavior in Kansas, the Detroitmanufacturer has to customize its products to suit the local market.In doing so, it will to a certain extent neutralize the effects ofthe Japanese manufacturer. The consumer can choose the products ofthe manufacturers and chose the best model of vehicle in terms ofquality and price.

Anothereconomic benefit observed over time is the ability of countries tospecialize in one product that is cheap to produce. The increasedmovement of goods allows country is to allow the importation ofvarious products that are not available in the local market. Thetrend reduces the constraint heaped upon government-funded entitiesto produce goods to meet all the needs of the citizens. There is nocountry that can be self-sufficient without involving other partnersin production and delivery of services. We can take the example of afished product like a shirt that can be available to consumers inevery corner of the world. Retracing the steps will enable us tounderstand the impacts of globalization on the specialization ofgoods and services. First, the cotton used to make thread mightprobably has its origins in Indi. The artificial fiber may have comefrom Portugal. The different colors come from different countries andthe sewing machines designed by a batch of creative engineers in thewest, probably in Germany (Boudreaux, 2008, p.3).

Thefinal manufacturer put the materials together and comes up with asshirt. After intense distribution, the shirts become available tomany of people. From this example, we can note that the efforts ofindividual countries contribute to the final product. Each countryspecializes on what is best in doing. Acting as individual countriesmay take ages before all the processes become complete, and theymight hike the price of the items due to increased cost ofproduction.

Anothereconomic effect of globalization is the increased investment inforeign countries. It occurs both as Foreign Direct Investment andPortfolio Investments. Globalization has enabled investors to crossthe boundaries and extend their ventures to other countries away fromtheir native lands. A good example is the American McDonald that hasbranches all over the world. A good number of investors alsoparticipate in portfolio investment. The sale of Microsoft share tointernational investors is a good example of how the barriers toeconomic growth collapse due to globalization. As Boudreaux puts it,”The today’s industry is 24 times higher that it was in 1960”(Boudreaux, 2008, p.4). The theory of underutilization seems to favorthe countries with surplus resources to spend in the internationalmarkets. Without the shrinking of the globe into a small village dueto the elimination of barriers, the countries opting to adopt thetheory would find it difficult to practice it.

Asmovements become easy, tourists venture into new areas to satisfytheir adventurous personalities. The move has a direct impact on thegrowth of the individual economy. It is also favorable for thetransport industries since thy leap directly from these clients.

Sinceglobalization is a concept that has irreversible consequences, it isimperative to understand the structures that support. First, manycountries formed regional blocks to facilitate trade and developed acohesive environment both for social and political purposes. Althoughmost of these associations are regional, they are a reflection of thewillingness of countries to allow other people into their economy.The example of the trade blocks occurs on every continent. InAmerica, there is the North American Free Trade Area (NAFTA) thatcollapsed the barriers created among the member countries. It allowsthe movement of people between member countries, and this facilitatesthe transfer of labor (Keynes,2006, p.4). Thecountries are also major in specializations whereby, the focus on theindividual country capability to produce certain good at a low cost.They, therefore, have favorable economies of scale. In Europe, thedominating European Union is not only a trade block but also apolitical entity. The member countries develop rules to unify them. They have a common currency, and this facilitates trade among them.In Africa, we have The Common Market for Eastern and Southern Africa(COMESA) (Boudreaux, 2008, p.6).

Countriesobtain goods from member countries without having to follow a lot ofbureaucracies. It is worth noting that globalization starts withneighboring countries before it extends to the whole country n o therest of the world. The regional associations were a big step towardsreducing barriers to trade and politics due to the governingprinciples in which every member country is a signatory.

Inthe late 19thand early 20thcenturies, there was a wave of capitalism and Marxism. The twotheories of development were at loggerheads with each other. Somecountries were radical capitalists, and they thought to be the mostefficient way to development. The professors of Marxism also enforcedtheir doctrine to neutralize the effects of capitalism. These forcescreated a division between the powerful regions in the country. Thewave of communism was also a major factor that made countries bewatchful lest their economy get infiltrated by an enemy from adiverging school of thought. In the 21stcentury, the forces collapse and individual countries did notcampaign for their economic trends with the gusto experienced in the19thcentury. The development saw the reconciliation in trade between theeastern and western countries. Today we have China trading withEuropean countries though they passed through different stages ofdevelopment.

Thedevelopment of transport and technology was also a major boost inglobalization. As people looked for work and trade partners, theyneeded the right forms of transport to travel across the globe. Asthe saying goes that necessity is the mother of invention, peopledeveloped faster and reliable means of transport. Today people canmove from one end of the world o another within a day. Communicationhas also become efficient whereby people share information fromdifferent parts of the world. It has both social and economicimplications. People become aware of new methods of production andavailable markets. International business persons can assess theviability of a market from their home country by sharing informationwith the traders in their areas of interest. Consumers can also makeorders of goods n locally available from online marketers. Thetransfer of currency arising from the sale goods and servicesimproves the financial condition of the traders.

Countriesthat allow other people to take part in their development grow at afaster rate than those which do not. Hong Kong is a prime example ofa niche that developed tremendously after allowing other people toengage in trade within its structures (Boudreaux, 2008, p.16). Theytransformed it from a charcoal selling land to one of the mostdensely populated cities in the world. The value of growth of grossworld product increased after people started trading with each other.There is a positive trend even in developing countries that allowother people to offer goods and services. Developed andindustrialized countries that lock away investors either remainstagnant in their development or they grow at a very insignificantrate (Boudreaux, 2008, p.17).

Inthe view of what can trip the economics of globalization, historianNiall Ferguson, a respected scholar at Harvard University argues thatthe aim of globalization can fall as they did in the 19thcentury. Drawing a counter response from the theory ofunderutilization, Boudreaux is of the opinion that countries needeach other than they did a century ago. Today, countries with surplusresources need to invest them in the developing countries. Thedeveloping countries, on the other hand, require the support of thedeveloped countries to hasten their pace towards industrialization.The forces of Marxism and capitalism that dominate din the 19thcentury no longer find a debatable position in the 21stcentury. Therefore, there is every prospect of globalization going toits next level of efficiency (Robinson, 1968, p.21).

Theeconomics f globalization extends to the economics of war. Thestatement draws its prop from the concept that war takes lack due toeconomic interests of the parties. Globalization has demolished theboundaries that kept countries immune to external forces. As peopleallow others to trade on their soil, they may come with stringsattached to their offers. Today, countries live in fear of beingattacked, and they are very suspicious of each other. When a countrybecomes economically stable, it spends a lot of resources putting anarmy together. Although this appears to keep off any potentialaggressors, it is clear that most countries are in a continuousprocess of preparing for war. The current condition in the world canspark a destructive war due to the advancement in communication,transport and war technology (Robinson, 1968, p.25).

Warand the world economics are inseparable. It is imperative to identifythe economic causes of war. First, the theory of under-consumptionplays an important role in fuelling the efforts of countries to lookfor new niches to put up investment projects. The major aim of theseinitiatives is to generate extra revenue for the home consumers. Before countries in the world developed a friendly attitude toforeigners, most of the viewed intruders with a lot of suspicions.They could not allow them to establish lasting businesses o n theirsoils.The scramble for Africa is one of the best examples of howunder-consumption can fuel a war. As nations in the West amassedresources, they had extra resources to be spent I expeditions andmovement of citizens to new areas. Some Africans revolted whileothers were to the yoke of colonialism due to their frail militarypower. Some western countries clashed in Africa as they sought tocontrol productive areas. All of them focused on controlling theAfrican wealth.

Today,there are a lot of alliances formed to suppress some regions by thestable economies in the world. It shows the fear that countries havetowards potential aggressors. When the enemies become strongeconomically, the chances of them waging war are very high. Countriesemploy the help of consular and ambassadors in different countries tosell their policies and consequently get support at the hour of need.During the First World War, the Great Britain had a significantnumber of its citizens investing in the international markets. Therelationship between these countries and the citizens gave Britainsupport, and it was, therefore, unbeatable both in military power anddiplomatic support (Robinson, 1968, p.65).

Howeveron the same note, war can result from an unintentional way thatindirectly leads to control wealth and resources. Afflicted countriesdevelop a major objective of freeing themselves from the powers offoreign countries. However, this is only a primary goal. Thesecondary role is the power to control their resources and have powerover them. Looking back at the African struggle for independence,countries fought back to regain their independence. The long-termpurpose of the war was to control the local resources that were atthe hands of the colonizers. Such a struggle forms part of thenational interests to protect its citizens from external aggression(Robinson, 1968, p.64).

Asimilar cause of associated with the protection of citizens occurswhen countries step in to protect investors in foreign countries.Most developed countries have investors in many regions, and theirsafety needs to be assured. The motive is economical since thesecondary objective is not to protect the lives of the investors butto protect their property and the continued trend of sending theprofits back to the home country. One of the things that createenmity between countries is the disrespect of foreigners (Robinson,1968, p.64). It disrupts the diplomatic cables in a country, and theconsular services may come to an end. Extremism on such tendency canmake countries to wage war against the partners in question.

Conclusively,the economics of war and globalization have far-reaching effects ontoday’s economy. Globalization results in favorable economicenvironments in the individual countries. The movement of goods andservices facilitated by efficient transport and communication leadsto the discovery of new markets. As the economy countries are obligedto protect their wealth and that of their citizens in foreigncountries. In the process war can result, as Marxism theory puts it,all wars have the focus of controlling wealth (Robinson, 1968, p.65).The constant fear in the world, as depicted by the daily preparationsof war by countries through the buying of war material to equip theirmilitary, is due to the need to control and protect resources. Themost important approach globalization is the institution ofmechanisms to protect the interest of citizens in individualcountries to ensure that it does not overpower their sovereignty.


Boudreaux,D. (2008). Globalization.Greenwood Press: London.

Keynes,J. M. (2006). Generaltheory of employment, interest and money.Atlantic Publishers &amp Dist.

Robbins,L. R. (1968). EconomicCauses of War.Howard Fertig: New York.