Economic Liberalization and Globalization

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Economic Liberalization and Globalization


Before we study the meaning of globalization, it is necessary to know the reason for studying globalization, which is a part of today’s modern world. In the pre-industrial stages every nation was interested in its own progress and development. In such a situation, international relations were very limited. However, with the development of industrialization, modernization, urbanisation, developed means of transport, communication science and technology, trade between countries of the world started breaking down and international or external relations between countries developed at a rapid pace.


Globalization as a term specifically refers to the policy adopted by the Government of India since 1991. The critical foreign exchange position, rapidly rising inflation and the urgent need for external aid prompted the government to accept the news terms.


and conditions for opening up of the Indian economy. This resulted in the removal of import restrictions and duties, meaning that India’s economy was liberalized importing foreign goods and allowing almost unrestricted free flow of foreign capital in practically all important sectors of the Indian economy.


Today there is a need for closer contact between the nations of the world. So different nations are co-related with each other and connected with each other through various aspects like communication, media, social relations, economic or it is called as globalization which involves the globe. World globalization, like socialism until recently, is currently in much use and the decline of socialist economics has greatly increased its prestige. Today economics is seen to be linear and economic life has become so competitive and interdependent that they have turned into one world market and economies are partially or fully globalized or are moving towards globalisation.


After independence, India adopted a policy of planned economic development and tried hard to achieve this by following a policy of mild protection and import substitution. With the announcement of the New Economic Policy in July 1991. There has been a gradual shift of employment from the organized sector to the unorganized sector during the last 10 or 15 years. The proportion of casual and contract labor within the organized sector is on the rise. This has been one of the major consequences of industrial restrictions during the 1980s. The new economic policy has accelerated this trend with the increasing importance of specialists, and more and more expected processing sectors have emerged in different parts of the country.


Globalization refers to a worldwide phenomenon that buys various First World and Third World countries into a close network of socioeconomic and political relations that transcend boundaries between countries. Globalization thus means the increasing interdependence of the world society.


Vertigo defines globalization as the intensification of worldwide social relations, which favors distant localities in such a way that local events are shaped by events many miles away and vice versa. McGrew also speaks of globalization as emphasizing the intensity and plurality of global interconnectedness.



Linkages mean that goods, capital, social, inspirational relations, technological development, ideas all actually flow across regional boundaries.





importance of globalization



The social context in which we carry out our day-to-day activities is the only way our lives are affected by events far removed from it. Then there emerges the will system or a single social order for the world. Although globalization is developing rapidly today, it is not an entirely new concept. However it has become very important today as the effects of globalization are being felt globally. Major economic reforms which till recently were considered almost impossible were introduced which are popular on structural adjustment or liberalization or globalisation.


This globalization of the Indian economy is the need of the hour. In view of the unsatisfactory economic record of previously closed economies such as East Germany, China, Poland and the USSR, the country has progressed well with open economies such as Hong Kong, Singapore, Taiwan and South Korea, which has led to the process of development under liberalisation. can be justified. Globalization Indian economy should prepare itself to move on non-conventional lines to achieve the goals of macro equilibrium between aggregate demand, aggregate supply, savings and investment revenue and expenditure, interpretation and import etc. The Indian economy needs to be completely rehabilitated to solve its fundamental problems. Poverty, unemployment and inequality, liberalization or globalization of the economy is the cure for all these ills.







A Sociological Understanding According to Hoogeveldt, sociologists have been at the forefront of the effect of giving globalization a consistent and rigidly heterodox status. In contemporary times, its development as a particularly sociological concept owes the greatest debt to Roland Robertson of the University of Pittsburgh. Strangely, globalization, or a concept similar to it, appeared early in the development of the social sciences. St. Simon observed that industrialization changed practices in different cultures of Europe.

Durkheim’s legacy to globalization was his theories of differentiation and culture. The state and collective consciousness must become progressively more tenuous and abstract in order to accommodate intra-society diversity. All this means that industrialization

Ion breaks collective commitments and opens the way for the elimination of boundaries between societies


Durkheim identified differentiation, Weber identified rationalization as the solvent of globalization. Weber’s concern with the success of rationalism and the speed of Calvinism spreading from Protestantism’s bed origins to infecting all Western cultures, as well as the homogenization of cultures, implied less commitment to values such as patriotism and methodism. But this globalization effect was also limited to Western Europe.


Of all the clinical terrorists, the most clearly committed to the globalization of modernization was Karl Marx. Globalization greatly increased the power of the capitalist class as it opened up new markets for it. The establishment of a ‘world market’ for modern industry only gave a cosmopolitan character from production beta bo to consumption.


In contemporary sociological theory, one of the theoretical debates around globalization surrounds its onset. Two broad patterns have been suggested

1) Dawn of a new era

2) through the powerful medallion of modernity


1) The Rise of a New Age – Martin Albro wants us to think about globalization in his own terms and in his own time. He speaks of the ‘Global Age’, which in his anger has been replaced by the ‘Modern Age’. The modern age has been replaced and superseded by a new global age with its own axial principles and distinctive cultural imagery. The ‘optical shift’ from pre-modern to modern to global is rooted in axial principles that place commerce, mobility and connectivity at the heart of our lives. Under this paradigm, three possibilities can be created through the intermediate category of modernity:-


  1. a) Globalization is seen in the historical competition of modernity. Robertson is a strong supporter of this new. Within the historical presence of the major modern institutions of capitalism, industrialism and urbanism, a developed nation state system forms a network of social relations characterized by globalization. Thus understanding modernity at the nexus of institution is a necessary hysterical nexus of globalization. Prior to this period the socio-institutional conditions and resources of the cultural imagination were not as simple as enabling connectivity. Robertson does not agree with Giddens’ view that modernity has directly led to globalization. Rather, Robertson insists that the contemporary type of globalization was set in motion long before modernity in the economic sphere, even before the rise of capitalism. However, he does not deny that some aspects of modernity have greatly increased globalization i.e. modernization accelerates the process of globalization.



  1. b) Globalization is seen as a consequence of modernity. Gidders in his book ‘Consequences of Modernity’ has offered one of the most sophisticated analyzes of modernization and its underlying globalizing properties, using the concepts of time-space difference and reflexivity to show that the interaction between the local and How complex relationships develop. He sees globalization as a consequence of the inherently expensive features of modernity. He lists one of his organizational groups as having such institutional characteristics as a) a capitalist system of commodity production (ownership of private capital and labor) (b) industrialization (technology requires a collective private capital and labor), (c) ) administrative capacity of the nation state (a) good surveillance system) (d) military command (for the centralization of control of an industrial society) He points out that his discussion of globalization focuses on modernity because he sees globalization as a consequence of modernity Modernity refers to universal trends that make global networks of relationships possible. And were originally expanding the temporal spatial distance of social relationships.


  1. c) Globalization is the result of the hegemony of modernity. Wallerstein sees globalization in its strategic role of maintenance of Western cultural dominance and its tendency towards universalism and hegemony. They believe that the concept of globalization is an object of obvious, ideological doubt, becoming a preceding and related concept, like modernization, it is intrinsically tied with the pattern of capitalist development as it moves through the political and cultural spheres. spread, it does not mean that every culture/society it meets becomes westernized and capitalist, but they have to establish their position in relation to the capitalist.


Wallerstein focuses on the emergence and development of the modern European will system, which he traces from its medieval origins in fifteenth and sixteenth countries to the present day. Capitalism operates in relation to long-term cyclical rhythms, central to which is the regular pattern of expansion and contraction of an entire economy, which

In one year trams have transformed the capitalist world economy from a system primarily based in Europe to a system covering the whole world.

Contemporary Globalization in the World



The task of globalization theory is to understand the sources and condition of this complex connectivity that is evident in all vertebrates and everywhere, Robertson would explain today that events in any one part of the world have consequences “for or in the context of events”. In other distant parts, it



relatirization may not always be positive. We need to understand that globalization follows the path of its own rigorous logic. Global connectivity means that we now experience distance in a way that is indifferent to it. This particular sense of closeness can be seen in the transformation of spatial experience into temporal existence. Robertson dated how connectivity colors a) closeness b) unity


  1. a) Contact and proximity refers to the shrinking of distances through a dramatic reduction in the amount of time it takes physical or representational (information technology) to cross distances. It also refers to spatial proximity through the idea of ‘pulling’ social ties across distances, of which Giddens speaks. The result of the shrinking global proximity or as one McLuhan describes it to be reduced as a ‘global village’. The United Nations uses the term ‘Global Neighbourhood’. Phenomenologically, closeness is described on a common conscious presence of the world, ‘more intimate and more understanding’. Figuratively it implies an increased immediacy and consequently a diminishing of actual distanced relationships.


  1. b) Connectivity and Integration For the first time in history the world is becoming a single serial and cultural setting. Thus in all walks of life, issues are no longer to be viewed independently from a local perspective, globalization has linked the world. The local has been raised to the horizon of ‘single world’. There are both increasing introductions of frames of reference and simultaneity. Robertson Cloughy believes that global unity does not mean additional weakness like world culture. It does not mean completeness and inclusiveness, even if it is holistic and inclusive. According to Rathi, it is a complex social and phenomenological situation in which different aspects of human life are brought into expression with each other. It should emphasize cultural differences more because it is recognized in relation to ‘the whole’. The will system can be divided into conflicts that are more intractable than previous disputes between nations.


Globalization needs to be industrialized and analyzed and multi-dimensional internals of the economy, politics, culture technology and the multi-dimensional internals of simultaneous and completely related processes in the realization of so trust. Robertson stresses that globalization should be understood as involving contradictions, resistances and counterbalancing forces, as it involves a duality of local and global opposing principles and tendencies. The particular and the universal, integration and differentiation.




  new economic policy



The structural adjustment loans brought about various changes in the policies of the Government of India. Before 1991, the Government of India tried to keep a minimum entry furnace of foreign enterprises in the Indian economy. Foreign companies were not given free market for their products but sometimes; Limit rules regarding foreign collaborations were maintained. Due to the structural adjustment of debts, the government had to remove these limits of control. So there the changes were welcomed and thus the new economic policy was formed. Due to this policy, the process of globalization entered India very fast. That’s why New Economic Policy is considered an important aspect related to globalization.


The July 1991 budget included the first stages of structural adjustment of the New Economic Policies. The following are the important elements of the reforms or changes introduced in 1991.

1) The major intention of the Indian government was to solve its balance of payments crisis.

2) It liberalized the policies on import-export and foreign trade. This meant that Indian businessmen as well as foreign enterprises were now free to enter into business relations with each other.

3) Due to this policy the internal control of the market ended.

4) The Government of India devalued the rupee to encourage exports. It increased professional tax and reduced income tax.


When the Government of India brought so many changes, they were considered positive and they increased the pace of globalization. However, the government had to make some other changes as well, which had negative consequences, eg. The Government of India had to reduce subsidies on agricultural inputs and prices within the Public Distribution System.


Positive and Negative Consequences of the New Economic Policy:


new economy

The IC policy brought about some important consequences in the Indian society as a result of it. Its results were both positive and negative.


Positive Result:


1) The government spent the amount on welfare and poverty alleviation programmes. This meant that additional finance




What the government earned by reducing the subsidy was used in positive activities.

2) One of the important outcomes was the justification provided to the New Economic Policy or the policy of liberalisation. The Government of India estimated the inflow of foreign capital in the form of direct investment. it was assured that

This would lead to faster growth for the economy, reduction in unemployment and increase in personal income.




negative consequences:


1) The new economic policies faced increasing poverty. There was a wage crisis.


2) One of the serious effects of the New Economic Policy was the increase in the amount of child labour. Thus affecting the future of the nation as children are the citizens of tomorrow. To ensure proper program for the nation it is necessary that the young generation should have a decent level of education. Children are deprived of education due to the problem of child labor and in fact they are traced and denied the right to education.


3) Withdrawal of government subsidies in agricultural inputs as well as in the public distribution system caused great loss to the poorer sections. There were fewer laborers who depended on daily wages.


4) Integrated rural development also suffered a setback due to the policy of the government. This resulted in heavy losses to the containment section and especially to those who depended on the guaranteed action plan in the slack season.


5) The policy of liberalization can also be linked to increasing rationalization and the regions started company with each other in favor of the central government. The basic objective of competition among the sector to get foreign capital. This resulted in ethnic movements and other serious conflicts.


6) The New Economic Policy largely brought back caste divisions. The private sector began to become more and more important. However, the private sector did not implement the policy of renewal. As a result, the Scheduled Castes and Scheduled Tribes were adversely affected. On the other hand, the privatization of the economy greatly benefited the Brahmins or the upper castes. Then there was center based economic division.


7) Under the influence of the new economic policy and the policy of liberalisation, multinational companies entered the Indian market very rapidly. although his admission was considered important by






The increase in foreign capital investment became the government, it created a number of negative consequences. MNCs had their own interests. They were more interested in local buyouts and mergers rather than genuine new ventures. Their main concern was to enter the Indian domestic market, e.g. Coca-Cola acquired Thums Up, Honda merged with Bajaj. Thus the trend of MNCs raised serious doubts about their own genuine concerns. The following were the allegations against the multinational companies.

1) They were exercising dominance and control over the local companies.

2) MNG showed a tendency to import outdated technology.

3) There was a marine brain chain especially going into the software industries.


8) The government had liberalized the control over experts under the new economic policy. Thus, some of the high capital Indian farmers started fulfilling their own self-interests. They were involved in exporting high quality products to foreign market for high profit. High quality Basmati rice and Alphonso mangoes are exported, in fact the majority of the Indian population does not get to see this quality of rice and mangoes. Thus farmers show interest in their profits.




Impact of Globalization on India



The concept of globalization has affected almost all the countries of the world. The impact of globalization on Indians has resulted in various changes in different walks of life. Some changes have been possible while some have had negative consequences. Globalization in India, especially in the economic or market aspect, has been very important, it has important social consequences, both positive and negative. One of the important effects of globalization on India is the New Economic Policy. The New Economic Policy has become extremely important if globalization is to be brought into the Indian society at a very large scale. This means that before the implementation of the New Economic Policy, the concept of globalization process was limited in its structure.


After the British left India in 1947, the condition of Indian society was not favorable at all. Low levels of growth in the economy and high levels of deprivation among the population marked the immediate post-independence situation. this or

It is necessary to improve the lower levels for stable economic growth. The result or solution to this problem was the creation of a planned, relatively closed economy with a high degree of government control and a policy of extensive subsidies.


The Government of India developed the policy of Five Year Plans which continues even today. Interest focused on industrialization and modernization through large capital investments in the Five Year Plans. The reason for this was to reduce the high economic growth. Gradually the subsequent five year plans focused more on welfare and poverty alleviation.


The Indian economy was divided into two major sectors, namely the public sector and the private sector. The private sector was important, but it did not venture into certain sectors of the economy because of the long gestation period. High capital investment as well as high risk. They wanted these industries to be within the country but neither by themselves nor under the control of foreign enterprise. Therefore, the main objective of the public sector was to set up industries in areas rejected by the private sector. When the Government of India tried to raise funds for this investment from the World Bank, it was given the following

Reference was made on written grounds.

  1. a) India was basically a public run school i.e. public sector was highly active in nature.
  2. b) In the view of world banks, agriculture is a major factor in India as compared to industries and therefore industrial goods should be reformed instead of domestic production.
  3. c) For setting up any industrial enterprise, assistance should be taken from multinational companies (MNC).


As soon as the World Bank disapproved the loan, India approached the USSR and processed the loans, despite the loan sanction, the USSR did not stop the problem in the Indian society, the old problems were solved to some extent as well as many important More serious problems Aloe eg. Within the bureaucratic framework, corruption, bribery grew rapidly.


The Five Year Plan also resulted in some partial policies such as the Rani Kranti which favored regions such as Punjab and this created differentiation between merchant regions in the country. The Indian government was also unable to influence the redistribution of income that would have boosted demand for domestic production. Thus India was now facing a new type of problem.


The Gulf happened in 1991. During this war India found it impossible to borrow from the world market. Non-Resident Indians or NRIs in this situation get worried about the money that they had invested in India and hence withdraw their deposits quickly. The situation made India further short of foreign exchange. with a shortage of foreign exchange




A balance of payments crisis emerged. India now found it impossible to build up its independent economy and was therefore forced to accept a structural adjustment loan from the World Bank. The loan popularly came to be known as the New Economic Policy.


 The international economy experienced a program of international economic integration, that is, the internationalization of production, trade, investment, and finance, also called globalization, since the 1950s. However, this process of globalization is not a global phenomenon, as finally accepted in a report published by the World Bank. In May 1996. Like the limits to economic growth, there are also limits to globalization and the reduction of state control of the economy and the growing awareness that no nation can secure tariffs without commitment to international obligations. However, there is still a long way to go before this vision can be translated into reality.






















Labor in a Globalizing World




Until liberalization in 1991, the government banned most imports, instituted price controls, and discouraged foreign investment. The performance of the Indian economy has been dominated by a regime of multiple controls, restrictive regulation and extensive state intervention. A major part of the nation’s savings was appropriated by the state through various administrative and tax measures, and was used to meet government expenses, public sick undertakings and their losses. The country’s industrial economy was prevented from growing due to rapidly advancing technology protected by the state and insulated against outside competition.



  economic globalization



As Karl Marx put it, the logic of capitalism itself seeks to extend the search for new markets to the search for sources of raw materials and capital, labor and profit. This was the reason that the British rule expanded its empire by forming new colonies in America, Africa and Asia. But globalization is a global economic process of change. Some of the basic aspects are covered as follows


1) Post-industrialism David Harvey argues that today there is flexibility in the production process, products and patterns of consumption, as well as the increased mobility of capital and labour. Organized sub-contracting, outsourcing etc. are what link third world and advanced countries. As large corporations took international marketing their hard work and dominated small business, Harnery argues that this is an example of capitalism becoming more centrally organized due to tighter controls on capital. This is made possible by a restructured financial system with the development of information technology.


2) World trade:- Diffusion production and consumption are linked together in world trade. Earlier Britain was the dominant country, USA used to lead. Many landlocked developed countries have also participated in world trade. There are many trade blocs like ASEAN, EV, NAPTA competition Map * has been extended “The push in industry and trade is towards globalization of markets.


3) Multinational Corporation (MNC):- Multinational Corporations have emerged as powerful lobby for the world. They capture most of the profits of the business market. Today, multinational corporations operate not only from the US, but also from other countries, in which more than 35,000 multinational companies will control approximately 1,70,000 foreign executives. One-third of world trade takes place within multinational companies in the form of transfers from one unit of one multinational company to another. Many multinational companies have entered in India and have been made good business e.g. MC Donald’s Food Chair Business.


4) New International Division of Labour:- Rich countries (core countries) spread their manufacturing activities all over the world. They spend money and buy labor.

Underdeveloped countries produce labor and it gets involved in fragmented manufacturing activities. According to Walla Stan, the core industries will control the market and production and make the underdeveloped countries dependent on them. More industrialized countries like cheap labor and easy access to raw materials and set up factories there. They also contract for already established factories in countries such as East Asia. But it has been confirmed that only in such areas as textiles, clothing, shoes, rich countries give contracts, in other areas they invest money in machine production.




And save labor cost. Through local branches, multinational companies invest money, do business, they also transfer technology by accepting large projects. Through joint ventures and marketing agreements, multinational companies form less developed countries as an expansion into local markets and further industrial partners.


  1. Financial Markets:- Through IMP there is a tendency of financially developed countries to undertake structural adjustment programs and conditional efforts of which currency devaluation is usually the first. Global financial institutions are gradually controlling the domestic policies of the member countries and since 1980 they are clearly in favor of privatization, liberalization and globalization. There was a major shift in international finance from banking to security markets. The massive increase in transaction volume in turn affected currency prices. Hence there has been a sharp distinction between the real economy and finance. The development of financial markets has affected loss-making developed countries, as the vast increase in foreign equity portfolio investment rather than direct investment has led LDCs to face a qualitatively new relationship with international capital.


  1. Labor Irrigation:- While financial marketing is minimal in most of the globalized labor markets. International irrigation is becoming a prominent feature of the globalized economy, despite high irrigation rates.





cultural process of globalization



The white economy process of globalization is based on the autonomy of the world system of capitalism or social and cultural PR

process of globalization. This approach asserts the separation of the economic, political and cultural aspects of globalization as a relatively autonomous or independent process technology and media dissolve boundaries between localities and allow cultural transmission at an increasingly rapid rate. were produced by modernization. Taken money transportation, social technology of power communication administration is progressing more rapidly and thoroughly in the scope of globalization culture. The contemporary growing spread of globalization led to an explosion of signs and symbols associated with modernity. All modern technology originated in advanced capitalist societies.

there are three effects

One. Export of the culture ideology of perfection from the center to the periphery.

  1. Cultural flow through human media dissolves boundaries.




  1. Insofar as human media symbolize or lead to the competition of human relations, they can connect people far enough apart that communities of interest or commitments can develop between people who have never met.





Labor in occupational structure, knowledge economy and current trends of labor



The occupational structure in industrialized countries has also changed significantly since the beginning of the 20th century. In the early twentieth century the labor market was dominated by blue collar manufacturing jobs, but over time the balance shifted to collar positions in the service sector. In the UK in 1900, over three quarters of the employed population was in manual (blue collar) work. Some 28 percent of them were employed in skilled, 35 percent in skilled and 10 percent in unskilled white-collar and professional jobs. By the middle of the century the population of manual workers in paid labor had fallen to less than two-thirds, and non-manual work had expanded accordingly. There has been much debate as to why such changes have occurred. The resources seem to be many; One is the continuous introduction of labor saving machinery, which in recent years has peaked in the spread of information technology in the industry. Another in the rise of manufacturing industry outside the West, particularly in the Far East. Older industries in Western societies have experienced major cutbacks because they are unable to meet with the more efficient Far Eastern producers who have lower labor costs.


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