The Pros and Cons of Globalization

Updated on November 9, 2018
PaulGoodman67 profile image

Since completing university, Paul has worked as a librarian, teacher, and freelance writer. Born in the UK, he currently lives in Florida.

A MacDonald's restaurant in Osaka, Japan.  Fast food chains and store brands are one of the more conspicuous elements of globalization.
A MacDonald's restaurant in Osaka, Japan. Fast food chains and store brands are one of the more conspicuous elements of globalization. | Source

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

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.

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.

Anti-globalization protest against the meeting of the Group of Eight in Heiligendamm 2007.  The anti-globalization groups are a mixture that includes environmentalists, social justice, and workers rights organizations.
Anti-globalization protest against the meeting of the Group of Eight in Heiligendamm 2007. The anti-globalization groups are a mixture that includes environmentalists, social justice, and workers rights organizations. | Source

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

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.

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

Anti-Globalization Protests

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

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
Globalization has opened up the world like never before.  Freedom of trade, ideas, and interdependence are transforming lives across the planet.  It has also brought problems too, however.
Globalization has opened up the world like never before. Freedom of trade, ideas, and interdependence are transforming lives across the planet. It has also brought problems too, however. | Source

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

After reading the pros and cons, how do you feel about globalization?

See results

Questions & Answers

    © 2011 Paul Goodman

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      • Ken Burgess profile image

        Ken Burgess 

        13 months ago from Florida

        The real goal of globalization, and the extremely powerful that are always pushing for it, is to create the cheapest, most conforming and subjugated working class as is possible. This constant search for cheaper wages, lower taxes and weaker environmental and other regulations, produces a downward spiral in socio-economic conditions in the United States and in countries around the world.

        For example, jobs moved from Detroit to Mexico in pursuit of lower wages twenty years ago, now are being moved from Mexico to China because of even cheaper labor and less restrictive laws.

        In the end, globalization puts the American worker in direct competition with the slave-labor-like worker in China. The American worker, with higher wage expectations, worker’s compensation, insurance and healthcare coverage expectations cannot compete.

        A government that favors globalization, open trade agreements, and free trade, is in opposition of its national interests, and is an enemy of its citizen’s best interests. Our Congress has been openly hostile to American workers for over a quarter century now, everything from China’s favored nation status to trade agreements like NAFTA have been attacks against the American worker, America’s standard of living, and America’s economic future and wellbeing.

      • Ewent profile image

        Eleanore Ferranti Whitaker 

        14 months ago from Old Bridge, New Jersey

        I find it amazing that globalization is such an "new" thing. Is it? So please do explain what Europeans were doing scouring the West Indies, the Orient and other parts of the world for spices and exotic goods?

        Those of us who worked in international companies laugh at this fear of globalization. Where have you been? After every world war, globalization increased for no reason other than the hunt for resources that don't exist naturally in one's country.

      • profile image

        calvin taruvinga 

        3 years ago

        Globalization i think it is there to modernize people so that they may be equality within people and societies

      • profile image

        bradmasteer from orange county ca 

        4 years ago

        The problem with globalization is when companies like AIG are so big that they can adversely affect many countries. But, as in the case of AIG,it was the US that bailed them out.

        The other problem is that the first step in globalization as seen in the US is that these companies first become super conglomerates. This consolidates the supply of their product to one company instead of two or more. This allows them to control the market from that consolidation alone. Customers now have one choice, where before they had two or more.

        The consolidation also lowers thee number of people that need to be employed by the conglomerate. The supply demand curve can be manipulated by the conglomerate.

        The government really didn't do us or the economy a favor when they bailed out the financial industry, and GM. They should have let these companies fail, and then reorganized them when they were in bankruptcy.

        Instead the incompetent and greedy executives were rewarded.

        So, globalization as a minor part of a company is a good things, but when it is the predominant factor then it is not, as proven by the companies that the government had to bail out in 2009.

        Thanks

        bradmaster

      • Leo Walsh profile image

        Leo Walsh 

        5 years ago from North East Ohio

        Another negative externality of Globalization is our illegal immigrant problem. There is no way that an un-subsidized Mexican farmer can compete with the low food prices coming via the USA's highly subsidized agribusinesses.

        So, in order to feed their families, many Latino farmers go to the USA. Work as landscapers or farm laborers. And send a portion of their income back home.

        Turns out the "Free Markets" work well it you're wealthy. Or are a wealthy nation. Not so much for the poor.

        Cheers,

        Leo (http://www.leo-walsh.com/)

      • Alexander Mark profile image

        Alexander Silvius 

        6 years ago from Portland, Oregon

        This is a very simple example of the dangers of a unified economic system and the cons definitely outweigh the pros. I was nearly swayed by the pros, but after looking at the cons, it brought to mind that in a capitalistic environment, or even a political one, the leader sets the pace and lifts up everyone else in its wake.

        There are certainly negative aspects to allowing successful capitalistic entities autonomy, but the alternative makes it necessary for a single entity to control the entire economic landscape. This is much worse than having a corporate entity control a portion of the market because in true capitalism, another will rise to fill the gaps that established and failing corporations and businesses create.

        Thankfully Obama saved us from that freedom when he bailed everyone out, which is why the world didn't collapse and we have no new car manufacturers to fill the gap GM would have created.

        There is much more going on behind the scenes than we are privy to, this problem will never go away and globalization will mature into adulthood.

      • CHRIS57 profile image

        CHRIS57 

        7 years ago from Northern Germany

        One main driver for globalization is that things are not equally distributed on this planet. Otherwise there would be not need to go global, everything could be kept local, there would be no benefit.

        But the world is different. In the middle ages herbs and precious goods were not produced or harvested in the Bagdad of "Thousend and one night", so it was to the individual knowledge and courage of traders to go to remote places and do trade. Marco Polo set out to Asia with pretty much the same task.

        In the colonial times product differences in this world were exploited by economies with superior logistic and organizational means, military power being one of those means.

        Today there is no more individual, secret knowledge of trading secrets. Modern communication and internet have done their thing. It is no more only natural resources on the global market, but also manufactured goods.

      • Genna East profile image

        Genna East 

        7 years ago from Massachusetts, USA

        "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."

        Sending jobs overseas is one of the elements that is destroying our middle class in the US. Very interesting article.

      • katrinasui profile image

        katrinasui 

        7 years ago

        You worked hard on this hub. well done::)

      working

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