Globalization and the weakening of nation-state powers

¶ … Globalization Weakened the Powers of Nation-States

Negative Influences of Globalization

In Spain and the United Kingdom

The process of globalization has, by far, been the most highly disputed phenomenon of the current society. The process generally refers to a massive unification of around the globe economies to form a free international market that supports friendly competition and avoids monopoly of the stronger states. More precisely, "globalization refers to a process of increasing global connectivity and integration between nation-states, households or individuals, corporations and other organizations. It is an umbrella term referring to increased interdependence in the economic, social, technological, cultural, political and ecological spheres."

In other words, globalization is applicable to all domains of the current life and it is best supported by economist David Ricardo's theory of compared advantages. According to this theory and the premises of globalization, countries should focus their activities on producing those goods and services for which they possess a certain advantage in comparison with other countries. The comparative advantages could be given for instance by large amounts of labor force, low costs of the labor force or abundance of natural resources (such as natural oil and petroleum in the Arab countries). After having easily produced the goods for which they detained a comparative advantage, countries would exchange those products on the international free market to get in return products and services hey encounter difficulties in producing.

Opinions are highly different among the general public; some sustain the process by pointing out its numerous advantages, whereas others object to it stating a series of disadvantages. The most relevant beneficial outcome of globalization was the enrichment and development of several Asian countries during the past twenty years. "Rapid growth and poverty reduction in China, India, and other countries that were poor 20 years ago, has been a positive aspect of globalization." Other relevant advantages pointed out by the advocates of globalization are the continuous support offered to third world countries in their social and economical development (by increasing their education possibilities and living standards); implementation of human rights around the Earth; support of free trade and free international markets.

Disclaimers of globalization have blamed the process and its supporters for numerous downsize effects, and intensely for increasing the unemployment rate, promoting inequality among countries, groups and individuals and also for contributing to "environmental denigration." "The critics typically emphasize that globalization is a process that is mediated according to corporate interests, and typically raise the possibility of alternative global institutions and policies, which they believe address the moral claims of poor and working classes throughout the globe, as well as environmental concerns in a more equitable way."

2. Globalization in the United Kingdom

According to the KOF (Konjunkturforschungsstelle der ETH Zurich) Index of Globalization, Great Britain is the forth most globalized country in the world, being preceded by Belgium, Austria and Sweden.

The United Kingdom has benefited from numerous strong features that supported implementation of globalization within the country. These features generally referred to "particular strengths in finance, science, innovation and creativity; a long history of trading links across the world; macroeconomic stability, flexible markets and openness to competition." Even so, globalization in the U.K. has had some negative effects upon the country.

Frenetic development pace for instance, entering a largely unified global economy has forced Great Britain to significantly increase their development pace. Having to compete with technological moguls such as China or India, the U.K. had to speed up their industrial and technological sectors at a frenetic pace, rhythm of development considered inappropriate and even dangerous.

Inhabitants' dissatisfaction

Globalization had a rather unsatisfactory response from the inhabitants of the United Kingdom. The English are generally a solitary population and tend to develop reticence towards any kind of foreign intervention. A population that guides its activities by protectionist laws and that barely accepts granting residence and work rights to foreigners was faced with international unification. Many did not accept it, fact which placed the English Government in a criticized position.

Globalization, supported by the formation of the European Union and its continuous enlargement by acceptance of new members has granted equal rights to citizens of all member countries. In this order of ides, inhabitants of poorer European countries were allowed to freely travel, live and work in the United Kingdom. This was yet another reason for public dissatisfaction, as the foreigners usually accepted to work for lower wages and therefore occupied the aboriginals' positions.

Globalization has also introduced the terms of off-shoring and outsourcing. The two terms are synonyms with the specification that off-shoring involves contracting workforce from across the ocean, whereas outsourcing involves contracting workforce from a neighbor country. The processes of outsourcing and off-shoring increased the level of general dissatisfaction among U.K. citizens and brought about severe criticism from protectionists and disclaimers of globalization.

Increased competition, cost reduction, formation of clusters

Another severe affect of globalization in the U.K. was brought about by the fierce full competition with other hi-tech companies around the world. Having customer satisfaction as their main objective, most companies drastically reduced costs to decrease the price of their products and services. However, not all companies could afford to reduce the costs and ended up proving unsatisfactory products or even ended in bankruptcy. A relevant example of cost reduction is given by telephone companies which registered an 80% decrease in the cost of a one-minute phone call from India to U.K. In less than three years.

Directly linked to cost reduction and the impossibility to cope with the international competition was the disappearance of small and medium size businesses. In order to face the threat of being put out of business by large multinational corporations, the local businesses gathered up into the so called clusters.

These clusters are meant to protect, aid and support its small business members against international corporations, but they cannot completely eliminate the forces of globalization. As such, "successful clusters can erode and unravel over time and continuing globalization and shifting comparative advantages can lead to this."

3. Globalization in Spain

Globalization's effects upon Spain have primarily been focused on "internationalization of production, an expansion in the trade of services, the emergence of developing countries as producers and exporters of manufactures, and the explosive growth of international capital flows."

However, aside from this, globalization brought Spain some unpleasant features. For instance, being a member of international organizations, Spain financially contributed to international budgets, but since it was considered a developed country, it did not benefit of substantial subsidies, most of these being redirected towards less developed countries. A consequence of that was an increase in the life styles of the LCDs (less developed countries) in the detriment of Spain whose economy stagnated.

Risks of globalization

Spain faced numerous risks upon globalization, such as the risk of its society's impossibility to cope with and adapt to the changes. Moreover, when embracing a free international trade, Spain was subjected to excessive capital flows that could have endangered the economic safety. Also, getting involved in the globalization process exposed Spain to the possibility of contracting several transmitted diseases brought in the country by foreigners traveling freely.

Aside from allowing diseases to enter the Spanish territory, globalization also brought about the possibility of allowing criminals to enter the country, fact that would increase the crime within Spain and endanger its inhabitants. Furthermore, a risk that does not primarily involve the safety of the citizens, but rather the way in which they are internationally perceived was the risks that the country would not cope with the demands of the external environment. Not only would such a situation denigrate the country in their partners' eyes, but it would also decrease the life standards of Spain citizens.