The Pros and Cons of Globalization
What is Globalization?
Globalization is the concept of international integration, resulting from the interchange of trade, products, ideas, culture.
It has been around for a long time in one shape or another. Ever since ancient times, trade routes have been operating between different parts of the world transporting ideas, as well as goods.
The term started to be used more and more in the 80s and 90s to explain the rapid changes in the world, as countries became more and more inter-connected.
Modern globalization is generally seen as beginning in the 19th century, although it has its roots in the European age of discovery and colonization of many parts of the planet.
Globalization has produced a new of level of interdependence among us. The economy and multinational supply chains do not abide by political boundaries. A computer ordered in Brazil is designed in California and assembled in several other countries. Economic integration was the first strong evidence of a new era.— Eduardo Paes
Globalization of Trade
In the 15th Century the most famous trade routes were the Silk Road, a land route which ran between Eastern Europe and China, and the Spice Trade, which was based mainly on sea routes and stretched between Southern Europe, East Africa and Southeast Asia.
The latest phase of trade globalization began in the aftermath of World War II, when politicians from major countries met to design a framework for international trade and finance.
The process of financial globalization accelerated with the fall of Communism at the end of the Cold War, and then received a big boost again with the revolution in computer technology and the dramatic growth of the internet.
The growth of the web means that somebody sat at a regular PC with a connection to the internet can carry out work for almost anyone in the world, often in ‘real’ time.
If you're totally illiterate and living on one dollar a day, the benefits of globalization never come to you.— Jimmy Carter
Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world's best talents and greatest ideas.— Jack Welch
The politics of globalization often revolve around the most economically developed countries, led by the USA, pushing for countries with less developed economies to lower trade restrictions and open up their home markets and resources, in return for access to potentially lucrative Western markets and foreign investment.
The anti-globalization movement is not one organization with one philosophy but an umbrella group consisting of people concerned with environmentalism, third world debt, workers' rights, child labor, animal rights, anti-capitalism, anarchism, and opposition to multinational corporations.
My list of the pros and cons of globalization aims to provide a summary of the main for and against arguments used by people when they debate the merits of globalization.
In Globalization 1.0, which began around 1492, the world went from size large to size medium. In Globalization 2.0, the era that introduced us to multinational companies, it went from size medium to size small. And then around 2000 came Globalization 3.0, in which the world went from being small to tiny.— Thomas Friedman
It has been said that arguing against globalization is like arguing against the laws of gravity.— Kofi Annan
Pros of Globalization
- Productivity grows in countries that open up their markets and integrate with outside economies. Rich countries gain access to emerging economies. Poor countries gain access to wealthy economies where they can sell their goods and services.
- Lesser Developed Nations benefit from the increase in investment from foreign countries both financially and through jobs.
- Global competition and cheap imports help to keep inflation down.
- Open economies help to spur innovation and new ideas on a global level, creating an effective ‘globalization of ideas’.
- Through globalization, countries can specialize more in what they produce and what they do best.
- Cultural intermingling means that countries learn more about other cultures, strengthening international bonds and making the people's of the world more open and tolerant towards each other.
- Shared financial interests mean that corporations and governments attempt to solve ecological problems together.
Where globalization means, as it so often does, that the rich and powerful now have new means to further enrich and empower themselves at the cost of the poorer and weaker, we have a responsibility to protest in the name of universal freedom.— Nelson Mandela
The negative side to globalization is that it wipes out entire economic systems and in doing so wipes out the accompanying culture.— Peter L. Berger
Cons of Globalization
- Wages and working conditions everywhere are pushed downwards as companies gravitate towards countries where the wages are the lowest and the workers’ rights are the worst.
- The environment suffers, as production moves to places where they have less strict rules and regulations about controlling pollution and deforestation etc.
- Many jobs are outsourced from more developed nations, like the USA, to lower wages economies, such as those in Indian and China, resulting in high unemployment in the Western countries.
- Globalization means that economic problems in one part of the world can spread easily and create a worldwide recession.
- Many of the deals made by more economically developed nations with lesser developed countries are unfairly weighted in favor of the more developed nations. For instance, subsidies to agricultural production by the more developed nations are often kept, making the competition unfair.
- Globalization undermines national sovereignties and national governments, as individual countries become increasingly at the mercy of international markets, and multinational corporations grow more powerful and influential.
- Social welfare schemes are threatened as countries with no safety net and poor safety records undercut prices of goods and services.
Anti-globalization protests have become increasingly common in recent years. Meetings that have been targeted by protesters include:
- World Trade Organization (WTO) which encourages free trade between nations
- International Monetary Fund (IMF) which supplies loans to countries with struggling economies
- World Bank, which supplies long term loans to countries to aid development
The 1 to 2 billion poorest in the world, who don't have food for the day, suffer from the worst disease: globalization deficiency. The way globalization is occurring could be much better, but the worst thing is not being part of it. For those people, we need to support good civil societies and governments.— Hans Rosling
We must ensure that the global market is embedded in broadly shared values and practices that reflect global social needs, and that all the world's people share the benefits of globalization.— Kofi Annan
After reading the pros and cons, how do you feel about globalization?
Questions & Answers
© 2011 Paul Goodman