(ii) Globalisation paves the way for removing inefficiency in production system.
Prolonged protective scenario in the absence of globalisation makes the production system careless about cost effectiveness which can be attained by following the policy of globalisation.
It also leads to creation of a new world order with no national boundaries. Economically, it simply means opening up of national market, free trade and commerce among nations, free flow of labour, capital and technology, and integration of national economies with the world economy.
Politically, it means limited powers and functions of state, more rights and freedoms granted to the individual and empowerment of the private sector culturally it means exchange of cultural values between societies and between nations; and ideologically, it means the promotion and spread of liberalism and capitalism.
It results breaking of national barriers and creation of inter-connectedness.
Globalisation is a composite process through which integration of nation-states across the world can be made by common economic, commercial, political, cultural and technological ties. They do not want to include the free flow labour within the parameter of globalisation set by them. Too many have no voice in its design and no influence on its course.” “We wish to make globalisation a means to expand human well being and freedom, and to bring democracy and development to local communities where people live.” But the advocates of the policy of globalisation argue that globalisation would help the underdeveloped, and developing countries to improve their competitive strength and attain higher growth rates. However, the advocates of globalisation, especially from the developed countries purposely limit the definition of globalisation to only three components, i.e., unrestricted trade flows, capital flows and technology flows. Thus taking the entire world as global village, all the four components are equally important for attaining a smooth path for globalisation. Accordingly, the term, globalisation has four parameters: (a) Permitting free flow of goods by removing or reducing trade barriers between the countries, (b) Creating environment for flow of capital between the countries, (c) Allowing free flow in technology transfer and (d) Creating environment for free movement of labour between the countries of the world. In this way, the imperialist nations gained much at the cost of the colonial countries who had to suffer from the scar of stagnation and poverty. The concept of Globalisation by integrating nation states within the theme work of World Trade Organisation (WTO) is an alternative version of the ‘Theory of Comparative Cost Advantage’ propagated by the classical economists for assuming unrestricted flow of goods between the countries for mutual benefit, especially from Great Britain to other less developed countries or to their colonies. Thus the globalisation of the economy simply indicates interaction of the country relating to production, trading and financial transactions with the developed industrialized countries of the world. By the term globalisation we mean opening up of the economy for world market by attaining international competitiveness.Another characteristic of globalisation is the control of economic activities by domestic market and international market.It also established coordination among the national economy and world economy.