Why and how did globalization occur? Different perspectives have different explanations as to why and how globalization evolved. Realists argue that international trade is most effective when there is hegemony in the world market, whereas liberalists believe that it is a matter of how countries use the idea of reciprocity in their decision about trade. I agree with the realist perspective because hegemony allows the global economy to enhance and international trade functions the best when a hegemon dominates the world market.
Realist perspective explains globalization in terms of the relative distribution of power (Nau 2007, 278). In their opinion, trade and economic activities thrives “only under favorable security conditions,” and those conditions rely on the relative distribution of power (Nau 2007, 279). They believe that alliances and hegemony are the two most affirmative security conditions. “’Free trade is more likely within than across political-military alliances; and …alliances have had a much stronger effect on trade in a bipolar than in to a multipolar world.’” (Nau 2007, 279) In other words, the fewer dominating states with power there are in the system, the stronger is the alliance and its effect on trade. In a multipolar world, countries cannot trust each other in trade because alliances are rarely permanent and therefore, countries might use the gains from trade to increase its military power and threaten to cause damage to the other country. Thus, realists argue that,
…world economic expansion should be least robust in a multipolar world where countries cannot be sure of stable alliances, more robust in a bipolar world because alliances are more predictable, and most robust in a unipolar or imperial world because there is no significant challenge to the military strength of the dominant power (Nau 2007, 279)
Realists believe that international trade is the most effective when a hegemon dominates the global market. According to the hegemonic stability theory, “a hegemonic power is necessary to support a highly integrated world economy.” (Nau 2007, 280) Nau explains that as long as there is a relative distribution of power, no one power can affect the system as a whole (280). When there are several equally competitive countries, the global economy reaches the model of a perfect market. Each state acts according to their self-interest, and such behavior leads to higher gains for everyone because “competition maximizes efficiency” (Nau 2007, 280) in a perfect market. However, there is no place for violence in a perfect market because a hegemon assures security by deploying a police...