Comparing Globalisation In 19th And 20th Century

Comparing sphericalisation In 19th And 20th Centuryglobalization is a curve that has developed enabling people around the world to communicate with apiece other much more easily. This has opened up a global market place where companies engage in worldwide manufacturing, marketing and dispersion of their products and services. Nayyar (2006) defines globalization as a process associated with increasing openness, growing economic interdependence and deepening economic integration in the world economy. Nayyar (2006) goes on to say that economic openness is not simply confined to sight flows, enthronisation flows and pecuniary flows, it also extends to flows of services, technology, information and ideas crossways national boundaries.Globalisation is prehistoric according to Nayyar (2006) globalisation is not new. Ideally the result of globalisation is the integration of societies and economies and toppling of national barriers. When this happens, the division of industry ris es in an world-wide stretch and multi upstartral heap in goods and services elevates, as well as capital flows and cross border business coronations.According to Nayyar (2006) the two decimal point of globalisation, the nineteenth and ordinal centurys, are similar in four shipway the absence or the dismantling of barriers to supranational economic transactions the breeding of enabling technologies emerging forms of industrial organization and political hegemony or dominance.thither were almost no restrictions on economic transactions across borders as the four decades from 1870 to 1913 were the age of laissez faire.. This was followed by three decades of autarchy and conflict during which international economic transactions were progressively constrained by barriers and regulations. However, during the succor one-one-half of the twentieth century globalisation followed the sequence of deregulation. Trade liberalization came start, which light-emitting diode to an unpreced ented expansion of international cunning between 1950 and 1970. The liberalization of regimes for abroad investment came next and there was a surge in international investment which began in the late 1960s. Financial liberalization came last, starting in the earlyish 1980s.Both manikins of globalisation coincided with a technological revolution in transport and communications which brought about an enormous reduction in the sequence needed, as also the cost incurred, in crossing geographical distances. The due south half of the nineteenth century saw the advent of the steamship, the railway and the telegraphy whilst the second half of the twentieth century witnessed the advent of jet aircraft, computers and satellites. emerge forms of industrial organization, in both points, played a role in making globalisation possible. In the late nineteenth century, it was the advent of survey exertion which was characterized by a rigid compartmentalization of functions and a spirited degree of mechanization. In the late twentieth century, the emerging flexible production system, shaped by the nature of the technical progress, the changing output cockle and the organizational characteristics (based on Japanese management systems), forced firms constantly to shoot between trade and investment in their drive to expand activities across borders.The politics of hegemony or dominance is conducive to the economics of globalisation. The first word form of globalisation from 1870 to 1913 coincided with what has been described as the age of empire, when Britain more or less(prenominal) ruled the world. The second phase of globalisation beginning in the early 1970s coincided with the political dominance of the US as the superpower.Nayaar (2006) also highlights most-valuable digressions between both the phases of globalisation in respect of trade flows, orthogonal Direct Investment (FDI) flows, financial flows and labor flows.During the period from 1870 to 1913, a wi th child(p) analogy of international trade was constituted by inter- fieldal trade, where primary commodities were transfer for manufactured goods. Thistrade was, to a significant extent, based on controlling advantage derived from natural resources or climatic conditions. During the period 1950-75, inter-industry trade in manufactures, based on differences in factor endowments, labour productivity or technological leads and lags, constituted an increasing proportion of international trade. Since 1970 intra-industry trade in manufactures, based on scale economies and product differentiation, constituted an increasing proportion of international trade. Further now about one-third of the international trade is estimated to be intra-firm trade, that is, trade between affiliates of the same company located in different countries. The composition of intra-firm trade has undergone a change, characterized by a energize decline in the impressiveness of primary commodities and an increa se in the importance of manufactured goods and intermediate goods.There is also a marked difference between the two phases in respect of the spatial and sectoral distri neverthelession of FDI. During the second phase, its distribution between the developed and developing countries was more uneven than in the first phase. However, the 1990s witnessed an increase in the cover of developing countries in FDI inflows, although still behind the developing countries. A small number of countries draw in the lions share of the FDI flows to the developing world. In 1913, the primary sector accounted for more than half (55%) of the long term foreign investment, followed by trade and distribution (30%), and the share of the manufacturing sector was very low. (10%). In the early years of this decade, the service sector accounted for about two-thirds of the FDI inflows. In the early twentieth century foreign investment was only long term. Two thirds of it was portfolios, while one third of it w as look although portfolio investment has risen sharply in the 1990s.In the last fanny of the nineteenth century, capital flows were a means of transferring investible resources to underdeveloped countries or newly industrializing countries with the most attractive growth opportunities. In the second phase, these capital flows were bound mostly for the industrialise countries which have high deficits and high interest range to finance public consumption and transfer payments rather than productive investment. During the first phase of globalisation from 1870 to 1913, the object of financial flows was to find avenues for long-term investment in search of profit. During the second phase of globalisation since the early 1970s, financial flows are constituted mostly by short-term capital movements, photosensitive to exchange rates and interest rates, in search of capital gains.The original difference between two phases of globalisation is in the sphere of labor flows. In the lat e nineteenth century, there were no restrictions on the mobility of people across national boundaries. Passports were seldom needed. Immigrants were granted citizenship with ease. Between 1870 and 1914, international labor migration was enormous. The only significant evidence of labor mobility during the last quarter of the twentieth century is the temporary migration of workers to Europe, the Middle East and East Asia. The present phase of globalisation has also found substitutes for labor mobility in the form of the trade flows and investment flows. For one thing, industrialized countries now import manufactured goods that actualize scarce laborThe first phase of globalisation in the late nineteenth century was characterized by an integration of markets through an exchange of goods that was facilitated by the movement capital and labor across national boundaries. The second phase of globalisation is characterized by an integration of production with linkages that are wider and de eper, except for the draw near absence of migration. It is reflected not only in the movement of goods, services, capital, technology, information and ideas, but also in the organization of economic activities across national boundaries. This is associated with a more complex- part horizontal and part vertical-division of labor between the industrialized countries and a few developing countries in the world economy.ReferencesNayyar, D. (2006) Globalisation, history and exploitation a tale of two centuries, Cambridge Journal of Economics, Vol. 30, No. 1 137-159.