Difference between globalization and capitalism
Globalization vs capitalism:
Globalization and capitalism are two terms that are seen to be used in profusion in the modern world because of which most people are misled in to believing that these two words can be used interchangeably and sometimes even as synonyms. Despite the fact that globalization and capitalism have almost become household names in the world today, how many people are truly aware of what these two words stand for or how they differ from one another? Therefore, this article seeks to shed some light on all those burning questions and confusions that surround the two terms, thereby enlightening the minds of many.
What is globalization?
Globalization is a rather vast topic that may take quite some time to define and yet, globalization in general would refer to the expansion of global relationships with regards to economy, culture and people that can be observed between nations all over the world. However, while other types of relationships still exist within the term globalization, it more or less refers mostly to economic relationships amongst countries. Globalization was a theory that was first introduced in the year 1930 in a publication known as “Towards New Education” which emphasized upon human experience in education. However, it was some time afterwards that United Nations arrived at a definite definition for the term globalization, thus branding it as free trade where limitations and barriers to international trade will be lifted by way of reduction of export fees, import quotas, tariff, restrictions on the movement of capital and on investment and etc.
What is capitalism?
First emerged in the 1600s as the successor of feudalism, capitalism can best be defined as a financial and a social system that recognizes individual property rights, individual consumption that approves of the private ownership of capital. It gave rise to the industrialization and is based on the rights of the individual and allows individuals unlimited opportunities in creating wealth for themselves. Capitalism also encourages the individual to own as much property and goods that they can afford to buy which in turn results in inequality. This inequality then results in each citizen striving to accumulate more wealth in order to stand above the rest and yet, this competition always falls within the basis that each individual respects the rights of other individuals. Any act of violence or aggression on an individual’s part is considered as illegal and is thus punished by law. The citizens of a capitalist society are provided with equal opportunity when competing as sellers or buyers of goods or property, with the government playing no part in it except setting up certain rules and regulations regarding the process. Capitalism is honest competition and letting the marketplace decide who has the better product for better prices and one sees no oppression of the individual here as a result.
What is the difference between capitalism and globalization?
At the very outset, capitalization and globalization seem very much similar due to its implementation of free trade and the like. And yet, distinctions must be made between these two theories due to the fact that they stand for completely different phenomena that preach completely different views. For starters, globalization is a rather vast theory that pertains to almost all aspects of life even though its economic aspect has been the most highlighted aspect. Capitalism on the other hand bears a very specific definition as an economic movement that altered the world significantly ever since its rise.
However, capitalism gives prominence to private ownership and encourages private accumulation of profit. There is no such mention of private ownership in globalization and instead, it highlights the lifting of barriers in international trade, thereby facilitating an easy flow in global economics. The times in which the two theories emerged are very different as well. Capitalism, although it was popularized in the 19th century, is a theory that emerged in the 16th century whereas globalization is of a much recent descent that saw the light in the 19th century.
However, with the emerging of globalization, capitalism has gained a whole new perspective. Even countries that had rejected capitalism has now embraced it as capitalism has become part and parcel of globalization, thereby allowing privately owned institutions all over the world to flourish. And yet however, these two terms are not to be used interchangeably as globalization essentially puts emphasis on free trade whereas capitalism is an economic theory that encourages and supports private ownership of property.
Tags: capitalistic system, competition, democracy, free economy, free enterprise, free market, free-enterprise economy, free-enterprise system, freeenterprise, industrialism, laissez faireeconomics, mercantilism, private enterprise, private ownership, private sector