A Critical Appraisal Of The Determinants Of Global Integration

1674 words - 7 pages

IntroductionThe present nature of the world economy is one of expeditious change. National economies, previously secluded from other nations by trade barriers, physical distance, time zones, different languages and culture, differences in government policy, and business practices are now merging. Determinants include reductions in trade barriers, advances in transport and telecommunications technology, and a convergence of material culture. Today, many national economies have advanced into an integrated global economic system. This process of global integration has been termed Globalisation. (Hill, 2003)In this globally integrated society an Irishman (Paddy) may drive to work tractor that was assembled in Holland by John Deere from components made in Taiwan and Poland that were fabricated from British steel and Indonesian rubber. Paddy might have filled the tractor with diesel at a filling station owned by an American multinational company. The diesel could have been made from Oil pumped out of a well off the coast of Iran by an Italian oil company that transported it to Ireland in a ship owned by a Spanish shipping line and so forth. This scenario depicts the present integrated world of today in the developed nations.ObjectiveThis paper will ultimately seek to identify and find fault with the various determinants of global integration. Initially, an understanding of what is meant by Global Integration and Globalisation will be presented. A comprehensive list of the determinants will subsequently be discussed. Following this a critical appraisal of the determinants will conclude the main body.Global IntegrationThe term 'Global Integration' supplicates the question; what in the 'Global' sense is being integrated? Hill (2003) refers to global integration as the globalisation of markets and production. The globalisation of markets refers to the merging of historically distinct and separate national markets into one global marketplace. The globalisation of production refers to the sourcing of goods and services from locations around the world to take advantage of national differences in the cost and quality of factors of production, such as labour, energy, land and capital. Global production enables companies to reduce their costs and / or improve their quality thereby giving them a competitive advantage.Globalisation DefinedThe sociologist, Anthony Giddens, defines globalisation as a decoupling of space and time, emphasising that with instantaneous communications, knowledge and culture can be shared around the world simultaneously.Ruud Lubbers (2003), defines it as a process in which geographic distance becomes a factor of diminishing importance in the establishment and maintenance of cross border economic, political and socio-cultural relationsGlobalisation is an undeniably capitalist process. It has taken off as a concept in the wake of the collapse of the Soviet Union and of socialism as a viable alternate form of economic organisation....

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