Difference Between Capitalism and Globalization

Difference Between Capitalism and Globalization


The major driving factor in capitalism is the quest to make profits and expand corporate power. Several capitalist institutions that exist in the modern world focus on making money and further expanding the business. This is directly opposed to the development and sustainability of society that the large corporations should be focused on. Profitability is the main driving force behind a capitalist economy, and the objectives of such institutions always focus on this aspect. Capitalism prioritizes development of almost anything above making profits, and this is characteristic with the large sizes of such global corporations that currently exist.

Establishing trade routes, linking up different economies as well as cultures are very significant priorities of the process of globalization. The process involves the integration of different world views for the mutual cooperation of the entire society (Sorrells, 2013). Interdependence is the dominant feature of globalization because nations work together towards common good. Resource exploitation and pollution is inherent in globalization, but the entire process involves the removal of a country’s borders and the restrictive trade measures. Trading ensues because there is a large exchange of products and services between nations as there is demand for certain products and services, and there are suppliers.


The system of capitalism generally began in the nineteenth century after the establishment of the first major financial institutions. The creation of the Federal Reserve Bank in 1913 marked a crucial birth in the advent of capitalism because money is used to control labor in the economy (Pfister, 2012). The subsequent loans that were provided through the First World War, the Years of the Great Depression and the Marshall Plan at the end of the Second World War helped perpetuate capitalism. This school of though is relatively new as compared to other dominant social systems that have been around for centuries.

As much as the term ‘globalization’ was first coined in the 1970s, the process has been happening for the longest period in time. The earliest forms of globalization are evident with the scope of the Spice Trade and Silk Road Routes in 1453 running between Asia, Africa and Europe. Subsequent long distance trading activities are evident in different parts of the world, with the undersea telegraph cabling between Europe, Africa, South and North America offering excellent examples. The trends of globalization have been in existence long before the first capitalist systems came into place.

Labor and Resources

Capitalism relies solely on human labor to create competition for goods and services and, subsequently, money. Labor is the most essential resource in a capitalist system because human beings are required to contribute to the overall work demands. A capitalist society thrives on organized labor where different professions hire specialized employees to handle specific responsibilities. Capitalism is possible in the modern world because the debt that exists in society prompts people to work in order to offset its impact. Labor, therefore, drives a capitalist system, and it thrives on the availability of large labor pools in different parts of the globe.

Globalization, however, is significantly different from capitalism because the main focus is on natural resources. The process of globalization is initiated in the first place because of the demand for specific goods and services (Osle, 2010). Different parts of the world are endowed with people who have specialized skills, or whose natural environment can handle specific products. Africa is known for its agricultural products, Europe for its technical advancements, North America for its supply of capital and the Middle East for its oil. These natural resources are responsible for driving globalization in the world because of the demand for specific natural resources.

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