Causes of Globalization

What explains this globalization? As in the case of classical globalization, It is certainly not attributable to conquest, the source of most previous historical episodes where a single economic system has held sway over a vast geographical terrain. In this 21^st century, ‘it has been perceived that globalization originated primarily from the economic and political domination of the USA, spreading modernity and consumerist values on distant local cultures. But in more basic sense, the source lies instead in the development of technology. The costs of transport, of travel, and above all the costs of communicating information have fallen dramatically in the postwar period, almost entirely because of the progress of technology.

It is clearly the availability of cheap, rapid and reliable communications that permits such phenomena, just as this is the key to the integration of the international capital market. The same factor is important in nurturing the growth of multinational corporations, since it is this which enables them to exploit their intellectual property efficiently in a variety of locations without losing the ability to maintain control from head office. Other factors are also at work, such as the spread of consumer knowledge about what is available that comes from travel and from advertising, itself encouraged by the communications revolution and its children like CNN. The reduction in transport costs is also a key factor underlying the growth in trade.

Of course, it needed a reasonably peaceful world to induce economic agents to exploit the opportunities for globalization presented by technological progress.

By: Parveen bansal