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Globalization is a vast topic, that encompasses many important concepts having to do with the way the businesses, economies, and society function on a global scale. One concept is the new phenomenon of globalization. This is the idea that although people have been connecting throughout history, the way people connect has changed dramatically (Roy, 2019b). This change is attributed to the invention of the internet, smartphones, and other mobile technologies. Today we are connected like never before and can communicate with people from across the world instantly.
This differs from the old phenomenon of globalization that views globalization as a structured process that has remained unchanged (Roy, 2019b). The new phenomenon of globalization better describes the processes involved with globalization in today's modern world. The last few decades are associated with great technological achievements that have and will forever change the way we connect. These major technological strides force us to look at the process of globalization in a new light.
The new phenomenon of globalization also relates to the concept of time-space compression.
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In both concepts, technological advancements are factors that affect the process of globalization. Originally proposed by David Harvey in 1989, the concept of time-space compression has to do with the increasingly fast pace of global economies (Time-Space Globalization, n.d.). Technological advances have allowed us to move capital and products faster than before, breaking down spatial barriers (Roy, 2019a). Some advancements include faster modes of transportation such as airplanes and highspeed trains, but it also includes the internet which allows us to communicate and network on a global scale (Warf, 2017).
These advances are important because time is money and it is considered a valuable commodity. In other words, time-space compression is the way technology has advanced to increase the efficiency of economic activities that are a driving factor behind globalization.
Another important concept is neoliberalism. This is a political and economic theory in which the government uses a Lazarre-fare approach. Neoliberalism was a response to the welfare state where there was significant government control. Under neoliberalism, individuals have entrepreneurial freedom due to "strong private property rights, free markets, and free trade" (Roy, 2019c). Neoliberalism works to liberate individuals, emphasizing individual responsibility through deregulation. Deregulation means there is little government interference or regulations in place to protect workers, consumers, or citizens. Neoliberalism also includes cutting public expenditures for social services, privatization, and eliminating public goods (Roy, 2019c). While the general goals of neoliberalism appear beneficial on the surface, the actual effects of neoliberal policies can be damaging and contribute to socioeconomic inequities. Elements of neoliberalism can be seen in the U.S. today under the Trump administration through the reduction of public spending programs like Medicaid and the deregulation of big business and the financial sector (Bessner & Sparke, 2017).
The movie, "Inside Job", looked at the factors that contributed to the 2008 global financial crisis. Prior to the 1980s, financial institutions in the United States were regulated. Over time this changed, and the financial industry was gradually deregulated. Just one example is the Glass-Steagall Act being repealed through the Gramm-Leach-Bliley Act, which limited government interference in the banking industry. This allowed major financial institutions to merge, creating several giant firms. Deregulation also saw risky investment behaviors with the use of derivatives. A significant factor that led to the housing bubble bursting, which gave rise to the financial crisis, was the fact that rating agencies were essentially handing out AAA ratings to collateralized debt obligations (CDOs). Unfortunately, many CDOs were backed by subprime mortgages that many homeowners were unable to pay back. The financial industry was profiting off of others' misfortune by selling them subprime loans which led to predatory lending behaviors. Finally, CDOs collapsed and investment banks were left with billions in loans. Soon after, other investment banks and financial institutions either collapsed or were on the brink of collapse. The federal government got involved and took over Frannie Mae, Freddie Mac, AIG and bailed out the banks. The Troubled Asset Relief Program was signed by President George W. Bush in October 2008, but it was too late. The damage was done, and the world stock market fell. In the U.S. layoffs and foreclosures continued as unemployment rose (Ferguson, 2010).
The movie highlighted the necessity of enforcing federal regulations on the financial sector. After government interference was reduced under the Gramm-Leach-Bliley Act, banks and investment firms were making reckless financial decisions to make a profit, even if it meant putting the global economy in danger (Ferguson, 2010). These industries need to be regulated by the government to protect the public and consumers. When large institutions have no federal regulations to abide by, they only look out for their best interest; which ultimately means making a profit for themselves regardless of the social and economic consequences of their actions.
The movie also showed how there are many conflicts of interest when it comes to politics and business. It gave examples of people who worked in the financial and banking industry while elected as a public servant, as well as politicians serving on the boards of these massive financial institutions. Following the 2008 economic crisis, many executives were let off the hook and not held responsible for the severity of their actions. They got to keep their fortunes, while thousands lost their jobs and life savings (Ferguson, 2010).
Two questions the course has raised in my mind are: What effects will future technological advancements have on the process of globalization? Will there be another technological advancement as significant as the invention of the internet?
Globalization is a vast topic that encompasses many important. (2019, Dec 19). Retrieved from https://studymoose.com/globalization-is-a-vast-topic-that-encompasses-many-important-example-essay
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