art-e-conomy _ reader - marko stamenkovic

Traditional interpretation of the features
and effects of globalisation on various countries
Traditionally, globalisation is defined as a process of growing economic interdependence
of countries not only in terms of increasing volume and increasingly diversified form of
production, but also in terms of international transactions in goods, services and capitals
and accelerated and extensive diffusion of technology, communications and finance.
The beneficial effects of the process, the neo-liberally defined globalisation, on economic
and social welfare are basically similar to the positive effects of specialisation and market
expansion through trade, stressed even by the early economists. Globalisation encourages
greater international labour division and more efficient savings allocation, increasing
thereby the productivity and standards of living of the classical individual. On the other
hand, facilitated access to foreign products enables consumers to choose between a wider
range of ever-higher quality goods and services at lower prices. Enterprises face increasing
competition. Moreover, the increasingly open access to numerous financial instruments
on various markets enables the country to mobilise savings at a higher rate.
In the traditionally defined globalisation process, the basic sources of economic growth
and structural changes within the national economy itself are international trade and
competition as well as the technological process. Each market economy is a dynamic
system featuring a continued process of structural changes. Economic progress in market
economy is largely a result of successful adaptation of the economic system to structural
changes. With the assumption of stimulating further adequate and continued changes
among various sectors of the economic system, employment structure and income
allocation, in the opinion of traditional economists, society as a whole is likely to benefit
from the described process of economic development. The distribution of benefits will not
be equal across all the segments of society. Some social groups benefit above average,
some partially, and some suffer.
Globalisation process, understood as a process of growing integration of the market of
goods, services and capitals, could also be regarded as a continuation of trends present
in the global economy as far as a century back (except for the periods of World Wars I and
II). However, until the end of World War I, although artificial barriers between countries
were rare, the traffic in goods and capitals was carried out mostly between modern-day
developed industries countries. Ever since mid eighties, globalisation process has been
significantly accelerated. Nowadays, almost all countries worldwide participate in the
process of globalisation. New technological possibilities have drastically lowered transport
and telecommunication costs and facilitated the process of integrating national economies
into the global market. International trade, direct investment flows and technology transfers
have become increasingly close and intertwined, and global economy is increasingly the
context of economic decision-making.
Rapid and strong integration of national economies into global economy through
trade, finance and technology, information networks and transcultural co-operation have
stimulated the prosperity of the world as a whole. However, the benefits of globalisation
are not allocated automatically or evenly across countries. Evidence points to a growing
polarisation both between developed and developing countries, and within these groups
of countries.
Some developed countries, such as France, Germany and Italy, are dealing with the
problem of unemployment, whereas Japan is facing instability of the financial market.
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