Globalisation and Class Polarisation

The global movement of people and technology has been used to define globalization. It is not a brand-new phenomenon in human history. For their economic and cultural interests, people have traveled to distant locations and occasionally settled there. In terms of economics, globalization is the process of opening up domestic markets to foreign businesses. The governments support domestic businesses that want to make investments abroad. This is thought to create a level playing field for global businesspeople and corporations to compete on. With the creation of the World Trade Organization and the ratification of the General Agreement on Tariffs and Trade (GATT) and General Agreement on Services, a new wave of globalization appears to have begun. These agreements forced the nations to liberalize their economies in order to compete on a global scale.

Advocates of globalization claim that the economic boom brought on by cross-border trade in goods and services will lead to an increase in national incomes, which will lead to a decrease in poverty and inequality as wealth trickles down to the populace. The other group of thinkers, mostly Marxists, believe that globalization is causing class polarization as predicted by Karl Marx. As an illustration of the polarization of the classes, they point to growing income disparities and inequalities in capitalist society. As a result, there are two different points of view on the question of whether or not class polarization is being exacerbated by globalization. To determine whether a connection between polarization and globalization exists or not, it is necessary to analyze both points of view.

The contradictions between the forces of production and the relations of production have historically developed, according to Marx's analysis of globalization. According to popular belief, capitalism can only survive by exploiting the working class. Marx thought that there was a real conflict between human nature and the requirements of living in a capitalist society. The historical process of the class structure becoming increasingly polarized—pushed to two ends with nothing in the middle—is described by Marx's concept of "Polarization of the Classes.". It predicts that classes will soon vanish and be assimilated into the bourgeoisie or the proletariat. According to Marxian analysis, the class structure will always become more polarized over time.

Karl Marx predicted "ever-increasing misery" for the majority of the population rather than merely asserting a tendency toward class polarization. And it was this "ever-increasing misery" that inspired the populace to overthrow capitalism through revolution. Marxists contend that the new waves of globalization are not based on free trade, which would benefit all nations in the world. As a result of these agreements, multinational corporations from the developed world are able to compete with small-scale industries in developed countries, causing the latter to suffer significant losses. Instead, this benefits the developed countries as well as the majority of developing countries in the world.

Data from reputable agencies show that polarization is growing, as Marx predicted. The information on rising inequality in the world makes this clear. The first paper to compile all the major components of household wealth—from financial assets and debts to land, homes, and other tangible property—for the entire world was published in 2006 by academics with the United Nations University's World Institute for Development Economics Research. According to this study's analysis of data from the year 2000, the world's richest 1 percent of adults—those with incomes of at least $514,512—owned 39.9 percent of all household wealth worldwide, which was more than the incomes of the world's poorest 95 percent of adults—those with incomes of less than $150,145.

According to a study by Oxfam titled "Wealth: Having it All and Wanting More," the richest 1 percent have seen their share of the world's wealth rise from 44 percent in 2009 to 48 percent in 2014, and if this trend continues, it will reach more than 50 percent in 2016. According to the report, the 80 richest people on the planet are equal in wealth to the world's 3 point 5 billion poorest people. Nearly all (46%) of the remaining 52 percent of the world's wealth is held by the remaining members of the richest fifth. Just 5% of the remaining 80% is shared.

According to the Credit Suisse Global Wealth Databook 2014, India's richest 10% of citizens hold 370 times more wealth than the country's poorest 10%. This wealth gap is particularly pronounced among the poorest 10% of citizens. Since 2000, India's top 10% of earners have increased their wealth steadily, and they now control nearly 75% of the nation's wealth. The country's super-rich, or the one percenters, have been getting even wealthier more quickly. In the early 2000s, India's top 1% owned a smaller portion of its total wealth than did the top 1% of the entire world. The world's super-rich are recovering, but this changed just before and after the global recession, and the top 1% of Indians now control nearly half of the nation's total wealth. The top 1% of super-rich people in the world are almost exclusively Americans. Just 0.05% of the world's ultra-wealthy are Indian.

The Gini index gauges the level of inequality in a nation's family income distribution. The lower a country's Gini index, the closer its income distribution is to being equal. The higher a nation's Gini index, the more unequally distributed its income is. The index would be zero if income were distributed perfectly equally, and it would be 100 if income were distributed perfectly unequally.

South Africa is the G-20 nation with the highest Gini score, while Japan has the lowest Gini score and is therefore the most "unequal" country. Other G-20 nations with noticeably low Gini indices are South Korea, Germany, and France, while Brazil and Mexico have noticeably high indices.

Inequality is one of the major issues facing our time, according to numerous surveys. One of the most noticeable aspects of a bigger, more complicated problem that includes inequality of opportunity and affects things like gender, ethnicity, age, disability, and others is income inequality specifically. Every nation on the planet is impacted by this. Less than 10% of the wealth in both developed and developing nations is frequently held by the poorest half of the population. The world must address this issue because it is a universal one. While it is true that global economic growth is accelerating, significant obstacles still exist, such as poverty, environmental degradation, persistent unemployment, political instability, violence, and conflict. These issues, which are addressed in many sections of this report, are frequently closely related to inequality.

It goes without saying that ignoring inequality has risks. People who are marginalized from society, especially young people, experience a sense of disenfranchisement and are easy targets for and participants in conflict. In turn, this undermines our democracies, weakens social cohesion and security, encourages unequal access to and use of global commons, and undermines our hopes for peaceful societies and sustainable economic growth.

Countries must adopt an integrated agenda that examines the issue from the social, economic, and environmental perspectives, including access to resources, healthcare, and education, in order to effectively address inequality. The cornerstone of these solutions is a package of initiatives that supports equitable access to resources and services, inclusive growth with decent jobs and livelihoods for everyone in society, as well as all of these goals. Disaggregated, high-quality, and more transparent data are needed to target investments and direct resources where they are most needed in order to increase impact.

Nobel Laureate Eric Maskin of Harvard University comes to a different conclusion when examining the current wave of globalization. According to Maskin's theory, this wave of globalization is also leading to greater inequality even though average income has been increasing due to increased trade and global production. According to the argument, globalization has increased some workers' wages, but not all workers' wages have increased equally. As a result, the wage gap between some workers and others has grown. Due to a decline in the demand for a particular group of workers' skills, their wages (typically low-skilled, low-wage workers) decline, while those of higher-skilled workers rise. In order to find the solution, according to Maskin, one must weigh the advantages to an economy's overall health against the drawbacks for a particular group of workers.

When describing the advantages of trade as a result of industrialization and affordable transportation (steamships and railways), 19th-century British economist David Ricardo is typically cited as the originator of the idea that globalization benefits everyone. The expansion of international trade and the improvement in national wealth appear to support the aforementioned hypothesis. Data showing a rise in the middle class' population also support this viewpoint.

Due to the fact that nearly all of the new global middle class members will live in Asia, this potential increase in the middle class is associated with a significant geographic redistribution. There are only 500 million middle-class consumers in Asia today, with Japan accounting for 25% of this group. There may be a six-fold increase, to about 3 points 2 billion people, within twenty years. By 2030, Asia's percentage of the global middle class would double, going from just over one-quarter to two-thirds. Meanwhile, the combined share of North America and Europe may fall from 54% to just 17%. This is partially due to these areas' slow population growth. But it also acknowledges the possibility that many people will leave the middle class and become wealthy by 2030.

It has been a historic shift, according to the United Nations, for the past 150 years. China, India, and Brazil's economies have grown to be on par with those of the industrialized G7 nations thanks to the new global middle class. They are expected to outperform the G7 by 2050, contributing close to half of global output. Additionally, within ten years, the middle class in Europe and North America will have decreased from more than half of the world's population today to less than a third. According to the Brookings Institution, there are currently 1 point 8 billion members of the middle class, and that number will increase to 3 point 2 billion by the end of the decade.

The bulk of this growth can be attributed to Asia. By 2020, the middle class is expected to triple, reaching 1.7 billion people. Three billion middle-class people will live in Asia by the year 2030. Compared to North America and Europe, it would be ten times greater. In the other emerging nations, there is also significant growth. By 2030, Brazil is projected to be the country with the largest middle class, with 313 million people. From 137 million to 341 million, it is anticipated to more than double in Africa and the Middle East. This class includes people who earn or spend $10 to $100 per day, according to organizations like the United Nations and the Organization for Economic Co-operation and Development (OECD). When you are financially free and able to purchase items like refrigerators or even consider purchasing a car, is when you have disposable income.

The UN claims that industrialization is what is fueling the growth. The economies of Britain, the US, and Germany were all drastically altered by the industrial revolution of the 19th century. The middle class was established as a result of income increases brought about by the transition from agrarian to industrial societies. However, a new stage of globalization has begun as a result of the "demand shock" brought on by the rising prosperity of middle-income nations. Millions of people will be lifted out of poverty and see an increase in their disposable income in the BRIC nations of Brazil, Russia, India, and China as well as elsewhere over the upcoming years. As businesses compete to meet the new demand for goods and services and millions of jobs are created, this presents problems with resource scarcity and its effects on climate change as well as great opportunities.

Marx and his theories on communism and class declined into the background with the fall of the Soviet Union and China's transition to capitalism. The idea that the class divide shaped the course of history was no longer held. Instead, a prosperous era of free trade and free enterprise appeared to start. With the aid of the capitalist tools of trade, entrepreneurship, and foreign investment, the broad influence of globalization, which connected the farthest reaches of the planet through financial bonds, outsourcing, and "borderless" manufacturing, gave everyone the chance to make money. The world was supposed to witness this phenomenon because capitalism appeared to be achieving its stated objective of ensuring everyone's wealth and welfare, making it the most extraordinary process of poverty alleviation in human history (Schuman). 2013).

However, it didn't take place. Instead, the world economy entered a protracted period of polarization, during which workers everywhere experienced unemployment, debt, and stagnant incomes, making Marx's criticism of capitalism as a system that is fundamentally unfair and self-destructive even more pertinent. Marx had proposed that the capitalist system would unavoidably result in the impoverishment of the masses when the wealth of the world ended up in the hands of a greedy few, leading to economic crises and escalating conflict between the rich and working classes. The critics of globalization offer data to demonstrate that while the rich are getting richer, the middle class and the poor are not. It is noted that this growing inequality is rekindling class division and conflict as workers around the world grow more and more indignant and enraged and demand a fair share of the global economy. In the US, society is seen as being divided into the "1 percent" (the influential and privileged superrich who are getting richer every day) and the "99 percent" (the common people who are struggling to make ends meet). Budget cuts in France have made the rich-poor divide glaringly apparent to the general public. China is also experiencing issues related to the rich-poor gap. The idea of the "iron rice bowl," the Mao-era practice of ensuring workers jobs for life, has ended with Maoism, and during the reform era, workers have had few rights, so tension between rich and poor is becoming a top concern for policymakers there (Schuman). 2013).