The term ‘globalisation’ has been subjected to a variety of interpretations. Though it may simply mean global interconnectedness, it includes a number of interlinked and complex economic, technological, cultural, environmental and political processes.
The concept of globalisation is closely connected to recent changes in the world economy. The entire industrialised world was hit by an economic crisis in the 1970s. Profits fell sharply and capitalist companies were forced to expand the international nature of their production and trade.
In the 1980s and 1990s capitalist corporations of rich countries have sought to increase their share of the world market by moving capital from country to country. Multinational Companies (MNCs), controlled the world market from developed countries but doing business throughout the world and, are the dominant actors in the world economy.
These MNCs are so rich that in terms of resources they rival the state & rules of international trade as well as domestic economic policies of countries throughout the world have been dramatically changed to meet the needs of free flow of capital, technology and profit across national boundaries.
The international economy has been substantially restructured to remove restrictions on such free flow. International economic and trade organisations like the World Bank, the International Monetary Fund and the World Trade Organisation are advocating and controlling this process of restructuring am the politics of the states are modified to meet the requirements of these organisations. The thinking, in these institutions is greatly influenced be ‘neoliberal’ ideas.
Such ideas had gained popularity in countries like U.K. and U.S.A. in the 1980s and came to replace the ideas of welfare stats Neoliberalism can be interpreted as a new version of individualism. During the process of globalisation neoliberal policies are being implemented in the underdeveloped countries.