One of the most cited buzzwords in the world today is the term “Globalization”. However, the word is used quite liberally to describe a variety of issues. Globalization can be defined as the worldwide integration of economic, cultural, political, religious, and social systems. This demonstrates the vast range the term includes. Globalization is not entirely a new phenomenon.
This research paper will discuss the following topics of interest: Is the process of globalization providing us a world with a fairer distribution of wealth? Why are there so many people who protest more and more violently against globalization? Is globalization increasing the world´s GDP and if so is that the complete and ultimate goal? This research paper attempts to provide answers to these questions. It is written in the frame of the course “Globalization” at Vilnius University and gives a rather personal opinion about special aspects of globalization.
Table of Contents
1. Introduction
2. Globalization and convergence
2.1 Convergence of countries´ GDP
2.1.1 Direct competition by means of migration
2.2. Divergence of individual´s wages
3. Globalization and increase of world´s GDP
3.1 Comparative advantage and trade obstacles
3.2. Correlation of GDP and happiness
Objectives and Core Themes
The primary objective of this research paper is to critically examine the process of globalization, specifically addressing whether it fosters a fairer distribution of global wealth, why it triggers public opposition, and whether the continuous pursuit of GDP growth is a justifiable ultimate goal. The paper explores the tension between economic integration and social well-being.
- Economic convergence between nations versus divergence of individual wages.
- The role of migration and trade as mechanisms of competition.
- The relationship between capitalism, globalization, and social inequality.
- Theoretical foundations of comparative advantage and trade liberalization.
- The correlation between GDP growth and human happiness.
Excerpt from the Book
3.2. Correlation of GDP and happiness
Following a strict classical economic line of reasoning, increasing GDP is the ultimate goal of economic policy. The simplest proof for this thesis is the utilitarian approach which is based on Jeremy Bentham´s theory and further developed by John Stuart Mill claims the so called greatest happiness principle. This is achieved by avoiding pain and gaining pleasure. Both theoreticians strongly focus on the individual as the centre of interest. They lay the foundation and validate classical economic theories. More is always better and more commodities provide us with greater happiness. Consistently almost all classical and neoclassical economic thought is based on this concept.
On the other hand there are other aspects of the human existence which these theories do not cover at all and neglect. An increase in GDP does not necessarily mean people are happier and research shows this phenomenon especially for rich, industrialized countries. Versus if the GDP grows rapidly, the happiness level stagnates. Maslow, with his theory about human motivation, gave a possible explanation. Once people have achieved a certain level of material wealth, their happiness grows by means of less tangible values.
Summary of Chapters
1. Introduction: This chapter defines globalization as a worldwide integration of systems and outlines the key research questions regarding wealth distribution, protests against globalization, and the goal of GDP growth.
2. Globalization and convergence: This section investigates how globalization affects economic convergence between nations through migration and trade, while contrasting this with the growing income disparity between individuals.
2.1 Convergence of countries´ GDP: This chapter analyzes how globalization facilitates economic convergence between countries through market integration and shared capital.
2.1.1 Direct competition by means of migration: The chapter explores how labor migration influences wage levels and contributes to the convergence of salaries across different countries.
2.2. Divergence of individual´s wages: This section discusses the systemic role of capitalism in creating winners and losers, leading to increasing wealth disparities among individuals.
3. Globalization and increase of world´s GDP: This chapter examines the positive impact of globalization on economic efficiency and global GDP growth.
3.1 Comparative advantage and trade obstacles: The chapter explains how foreign trade, based on Ricardo’s principles, allows for more efficient production and growth despite the persistence of some trade barriers.
3.2. Correlation of GDP and happiness: This chapter critically evaluates the assumption that GDP growth leads to increased human happiness, introducing alternative views on subjective well-being.
Keywords
Globalization, GDP, Capitalism, Migration, Foreign Trade, Wage Convergence, Income Divergence, Comparative Advantage, Happiness, Subjective Well-being, Utilitarianism, Wealth Distribution, Social Inequality, Economic Policy, Labor Mobility.
Frequently Asked Questions
What is the primary focus of this paper?
The paper examines the current issues surrounding globalization, specifically its impact on economic equality, the reasons for public protest against the process, and the validity of using GDP as the primary metric for economic success.
What are the core thematic areas addressed?
The core themes include the convergence of national economies, the divergence of individual wages, the mechanics of foreign trade and migration, and the complex link between material wealth and human happiness.
What is the main research question?
The research questions whether globalization leads to a fairer distribution of wealth, why it faces increasing violent protests, and whether increasing world GDP is an appropriate ultimate goal for society.
Which scientific methods are utilized?
The author uses a theoretical economic analysis approach, drawing upon classical economic theories (Ricardo, Ohlin, Samuelson) and social science perspectives (Marx, Veblen, Maslow) to evaluate current global economic trends.
What is discussed in the main part of the text?
The main part covers the theoretical basis of convergence through migration and trade, the systemic inequality inherent in capitalism, and the criticism of prioritizing GDP over qualitative human happiness.
Which keywords best characterize this work?
Globalization, Capitalism, GDP, Migration, Trade, Convergence, Divergence, and Well-being are the most defining concepts of the work.
How does the author view the relationship between capitalism and globalization?
The author posits that globalization merely shifts the problems inherent in capitalist systems to a global scale, making them more difficult for national governments to manage and regulate.
What explanation is given for the "happiness paradox" in rich countries?
The author suggests, referencing Maslow and Stutzer/Frey, that once a certain level of wealth is attained, further economic growth provides diminishing returns for subjective happiness, as non-material values become more important.
- Quote paper
- Emanuel Alfranseder (Author), Adam Birnstein (Author), Brano Sedlacek (Author), 2007, Current Issues of Globalization. Does Globalization Provide us with a Fairer Distribution of Wealth?, Munich, GRIN Verlag, https://www.grin.com/document/91366
