Neo-Liberalism and Globalization: My Reflections

Neo-Liberalism and Globalization: My Reflections It has been said before that the world is slowly becoming a global village. Indeed, from an economic perspective, the world is becoming smaller. Today, unlike several decades ago, regional and national boarders are no longer considered barriers to trade. Globalization is increasingly becoming a reality. However, like neo-liberalism, globalization has encountered both support and opposition from a variety of quarters.

There are also those who are convinced that with globalization becoming a reality each passing day, governments from across the world should be encouraged to fast track the creation of free markets. In the words of Carroll and Buchholtz (2011): Globalization under conditions of neo-liberal economics involves the incremental integration of the world economic order through systematic reductions in barriers to trade and investment and through the implementation of other liberalization policies and practices.

When it comes to the economic development and progress of nations, the relevance of globalization cannot be overstated. Thanks to globalization, consumers from across the world can now access better quality goods as well as services. According to Boulle (2009), as co-dependence among nations increase; countries seek to import goods and services from other jurisdictions that specialize or have a comparative advantage in the production of the said goods and services. Such specialization lowers production costs with consumers benefiting from the resulting decrease in the price of goods and services.

In my opinion, cheaper imports driven by global competition could help countries realize their economic growth projections by keeping a lid on prices and by extension, inflation. It should however be noted that there are those who are opposed to globalization citing various concerns. Some argue that in an attempt to further enhance their bottom line; many companies in developed countries are increasingly outsourcing jobs to low-wage countries.

An example of this according to Boulle (2009) is the outsourcing of professional services as well as call centers to locations in foreign countries. It has also been argued that thanks to globalization, some countries could find their markets flooded with goods of questionable quality. Such goods could put both the health and safety of citizens at risk. However, this is a problem that can be averted by having proper regulations in place.

It should however be noted that the full benefits of globalization cannot be reaped unless we allow a worldwide free market to thrive. Such a market should ideally be free from barriers and restrictions especially in regard to government regulation. Neo-liberalism in the words of Boulle (2009) "postulates the legitimacy of market economics, liberalized trade, privatization, deregulation and a limited state system." Therefore, as an economic approach, neo-liberalism seeks to facilitate economic development by encouraging the creation of a laissez-faire environment.

It advocates for the opening up of markets to trade by amongst other things encouraging the privatization of state-run businesses. In my opinion, neo-liberalism would facilitate the creation of an economic climate that is more competitive thus allowing for the emergence of superior business practices. With little or no government interference and/or involvement, competition would force business entities to enhance the quality of the various goods they produce while at the same time reviewing the prices of such goods downwards. All this would be to the benefit of consumers.

It has also been argued in the past that economic freedom (i.e. In terms of fewer government restrictions, etc.) is a precursor to political freedom. This is a point-of-view that was mainly propagated by Milton Friedman. Friedman according to Rowley and Schneider (2003) "points out the historical fact that economic freedom and political freedom are inextricably connected." In that regard, government interference and participation in economic activities could create a necessary condition for political repression. Some are however convinced that businesses cannot effectively regulate.