The Pros and Cons of Globalization


A story in the Washington Post said “20 years ago globalization was pitched as a strategy that
would raise all boats in poor and rich countries alike. In the U.S. and Europe consumers
would have their pick of inexpensive items made by people thousands of miles away whose
pay was much lower than theirs. And in time trade barriers would drop to support even more
multinationals expansion and economic gains while geo political cooperation would
flourish.”

There is no question that globalization has been a good thing for many developing countries
who now have access to our markets and can export cheap goods. Globalization has also been
good for Multi-national corporations and Wall Street. But globalization has not been good for
working people (blue or white collar) and has led to the continuing deindustrialization of
America.

Globalization is a complicated issue. It is necessary to evaluate the pros and cons before
drawing any conclusions.

Pros

Supporters of globalization argue that it has the potential to make this world a better place to
live in and solve some of the deep-seated problems like unemployment and poverty.

1. Free trade is supposed to reduce barriers such as tariffs, value added taxes, subsidies, and
other barriers between nations. This is not true. There are still many barriers to free trade. The
Washington Post story says “the problem is that the big G20 countries added more than 1,200
restrictive export and import measures since 2008

2. The proponents say globalization represents free trade which promotes global economic
growth; creates jobs, makes companies more competitive, and lowers prices for consumers.

3. Competition between countries is supposed to drive prices down. In many cases this is not
working because countries manipulate their currency to get a price advantage.

4. It also provides poor countries, through infusions of foreign capital and technology, with
the chance to develop economically and by spreading prosperity, creates the conditions in
which democracy and respect for human rights may flourish. This is an ethereal goal which
hasn’t been achieved in most countries

5. According to supporters globalization and democracy should go hand in hand. It should be

pure business with no colonialist designs.
6. There is now a worldwide market for companies and consumers who have access to
products of different countries. True

7. Gradually there is a world power that is being created instead of compartmentalized power
sectors. Politics is merging and decisions that are being taken are actually beneficial for
people all over the world. This is simply a romanticized view of what is actually happening.
True

8. There is more influx of information between two countries, which do not have anything in
common between them. True

9. There is cultural intermingling and each country is learning more about other cultures.
True

10. Since we share financial interests, corporations and governments are trying to sort out
ecological problems for each other. – True, they are talking more than trying.

11. Socially we have become more open and tolerant towards each other and people who live
in the other part of the world are not considered aliens. True in many cases.

12. Most people see speedy travel, mass communications and quick dissemination of
information through the Internet as benefits of globalization. True

13. Labor can move from country to country to market their skills. True, but this can cause
problems with the existing labor and downward pressure on wages.

14. Sharing technology with developing nations will help them progress. True for small
countries but stealing our technologies and IP have become a big problem with our larger
competitors like China.

15. Transnational companies investing in installing plants in other countries provide

employment for the people in those countries often getting them out of poverty. True

16. Globalization has given countries the ability to agree to free trade agreements like
NAFTA, South Korea Korus, and The TPP. True but these agreements have cost the U.S.
many jobs and always increase our trade deficit

Cons

• The general complaint about globalization is that it has made the rich richer while making
the non-rich poorer. “It is wonderful for managers, owners and investors, but hell on workers
and nature.”
• Globalization is supposed to be about free trade where all barriers are eliminated but there
are still many barriers. For instance161 countries have value added taxes (VATs) on imports
which are as high as 21.6% in Europe. The U.S. does not have VAT.

• The biggest problem for developed countries is that jobs are lost and transferred to lower
cost countries.” According to conservative estimates by Robert Scott of the Economic Policy
Institute, granting China most favoured nation status drained away 3.2 million jobs, including
2.4 million manufacturing jobs. He pegs the net losses due to our trade deficit with Japan
($78.3 billion in 2013) at 896,000 jobs, as well as an additional 682,900 jobs from the
Mexico –U.S. trade-deficit run-up from 1994 through 2010.”

• Workers in developed countries like the US face pay-cut demands from employers who
threaten to export jobs. This has created a culture of fear for many middle class workers who
have little leverage in this global game

• Large multi-national corporations have the ability to exploit tax havens in other countries to
avoid paying taxes.

• Multinational corporations are accused of social injustice, unfair working conditions

(including slave labour wages, living and working conditions), as well as lack of concern for
environment, mismanagement of natural resources, and ecological damage.

• Multinational corporations, which were previously restricted to commercial activities, are

increasingly influencing political decisions. Many think there is a threat of corporations
ruling the world because they are gaining power, due to globalization.

• Building products overseas in countries like China puts our technologies at risk of being
copied or stolen, which is in fact happening rapidly

• The anti-globalists also claim that globalization is not working for the majority of the world.
“During the most recent period of rapid growth in global trade and investment, 1960 to 1998,
inequality worsened both internationally and within countries. The UN Development
Program reports that the richest 20 percent of the world's population consume 86 percent of
the world's resources while the poorest 80 percent consume just 14 percent. “

• Some experts think that globalization is also leading to the incursion of communicable
diseases. Deadly diseases like HIV/AIDS are being spread by travellers to the remotest
corners of the globe.

• Globalization has led to exploitation of labour. Prisoners and child workers are used to work
in inhumane conditions. Safety standards are ignored to produce cheap goods. There is also
an increase in human trafficking.
• Social welfare schemes or “safety nets” are under great pressure in developed countries
because of deficits, job losses, and other economic ramifications of globalization.

Globalization is an economic tsunami that is sweeping the planet. We can’t stop it but there
are many things we can do to slow it down and make it more equitable.

What is missing?

Leadership – We need politicians who are willing to confront the cheaters. One of our
biggest problems is that 7 of our trading partners manipulate their currencies to gain unfair
price advantage which increases their exports and decreases their imports. This is illegal
under WTO rules so there is a sound legal basis to put some kind of tax on their exports until
they quit cheating.

Balanced Trade – Most of our trading partners can balance their trade budgets and even run
a surplus. We have not made any effort to balance our trade budget and have run a deficit for
more than 30 years resulting in an $11 trillion deficit. The trade deficit is the single biggest
job killer in our economy, particularly manufacturing jobs. We need the government to
develop a plan to begin to balance our trade deficit even though this is not a political priority
in either party.

Trade Agreements – Both the NAFTA and the South Korean Korus trade agreements might
have been good for Wall Street and the multi-national corporations but they eliminated jobs
in America and expanded our trade deficit. The upcoming Trans Pacific Trade Agreement
will do the same thing and Congress should not fast track this bad agreement for a dozen
reasons.

Enforcing the rules – China ignores trade rules and WTO laws with reckless abandon.
Besides currency manipulation they subsidize their state owned companies to target our
markets, and provide funding to their state owned companies that dump their products in
America. They also steal our technologies, sell counterfeit versions of our products, and
impose tariffs and other barriers anytime they want - as we do nothing to stop them. China
does not deserve to be on our most favoured nation list and we need to tax their exports to us
until they stop these illegal activities.

What is good for third world countries, like Kenya, or countries with tremendous growth, like
China, has not been good for American workers. Globalization is deindustrializing America
as we continue to outsource both manufacturing blue collar and white collar jobs. Supporters
of globalization have made the case that it is good because it has brought low priced imported
goods, but they have not matched the decline of wages in the middle class and will not offset
the loss of many family wage jobs
Globalization is like being overwhelmed by a snow avalanche. You can’t stop it – you can
only swim in the snow and hope to stay on top. I would like to make the argument that the
US should try a lot harder to swim in the snow and stay on top. We can’t stop globalization
but there are many policies and strategies we can use to make it more equitable. We can
enforce the trade laws, force the competition to play by the same rules, and stop giving our
competitors the tools (technology and R& D) to ultimately win the global war.

IMPACT OF GLOBALIZATION: THE GOOD, THE BAD, THE INEVITABLE

Globalization is not a new concept in the world. It may be farther along and advancing at a
faster rate than ever before, but globalization has been around for hundreds and, arguably,
thousands of years. The Silk Road spanned one-sixth the diameter of the planet – literally
connecting the West and the East – and began during the Han Dynasty (roughly 200 B.C.).

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globalization and how it simultaneously shapes our cultures and economic relationships.

What, Exactly, Is Globalization?

There are two ways of looking at globalization. One is as an accidental or inevitable effect of
economic growth; industry, technology, communication, etc. As the economy grows, it is
only natural for a global market to become established in previously local areas. For this to
happen, free trade and the free movement of capital are essential. Globalization is not just
expansion; it is, as Merriam-Webster nots, “an increasingly integrated global economy.” For
integration to occur, economic freedom is necessary. Expand your knowledge of our global
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The second way of looking at globalization is as a deliberate process, and this is almost
certainly more accurate. Yes, there is a degree of inevitability involved, but this is due in
large part to the agreements made between nations, between corporations, etc. Business
wants globalization and it has almost single-handedly caused it to happen. The Silk Road was
not a humanitarian effort. It was about a vision of business. And these visions become
grander and more easily conceived as technology and politics progress so fast that
globalization does, after all, seem inevitable.

Globalization: A Purpose

There is not one purpose of globalization; there are many, many more than I can list. But
from this point forward I want to abandon this general talk of globalization and focus solely
on the economy; or, more specifically, globalization and business.
So why do businesses actively work to make globalization happen? An initial answer is easy:
cheaper production costs and more consumers to sell to. Globalization has a hand even in the
smallest businesses (at least, in first-world countries). And where do these businesses go for
cheaper production costs? China is the cliche example, but other popular options include
India, Brazil, Russia, Mexico, Bolivia, Indonesia and a number of Eastern European
countries.

The first company I worked for when I lived in New York employed about 15 people, yet all
of our production was out-sourced to China. Even a small business can benefit from the
incredible production savings to be found overseas, and this (along with the obvious fact that
there are more people to sell to) is why businesses actively and aggressively promote
globalization.

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In the end, globalization is all about competition. Lower production costs? That’s a
competitive advantage. More consumers? Another competitive advantage. Untapped markets,
different services, investment opportunities . . . all competitive advantages. As soon as the
first company went global, everyone else had to follow suit to keep up. Globalization is about
growth, sure, but it is also about establishing the ultimate competitive position: diverse
resources, diverse interests, diverse markets, and diverse acquisitions; in a word, a portfolio
so diverse it can only be attacked piece-meal, i.e. the proverbial “unsinkable ship.”

The Benefits of Globalization

For some people, globalization is synonymous with world destruction. In the end – who
knows – maybe this will be true? But in reality there are many good things that have resulted
from globalization. In this section, I will still focus on the economy, but I would also like to
touch on some social advantages, as well.

Efficient Markets

Many Americans do not appreciate how efficient our markets are (efficiency here meaning
supply and demand). These efficient markets allow economies to grow, and in a global world,
when one economy grows, it spurs growth in all the other economies that are connected to it.
In this way, reverberations of success are felt across the world, even when they are most
profound in one area. Needless to say, this is a very good thing.

Wealth Equality

This is partially a result of what I just mentioned, but wealth equality around the world goes
much deeper than that. Perhaps a better phrase than wealth equality is “standard of living.”
Globalization does several things nobody can deny: it creates jobs, it improves infrastructure
and it allows more people to live at a higher global level every day (access to medicine, clean
water, food production, housing, etc.).

Friends With Benefits

Globalization results in partnerships between countries and organizations. This makes
relations much more stable between both. Agreements are agreed to, and as long as these are
upheld, a kind of world-cooperation is sustained. Having these friends with (economic)
benefits provides both stability and security for countries that wish to remain peaceful and
prosperous.

New Solutions

Globalization allows important processes to happen more efficiently and important ideas to
become reality. There is a certain irony involved in this, however. For example, globalization
is going to allow the world to work together to (hopefully) solve our apocalyptic
environmental predicament; but of course, this predicament is a result of globalization.

Still, it allows the human race to push forward, which at this point we must recognize as a
necessity of our species. Progress is written in our DNA, and globalization has allowed us to
accomplish truly incredible things (the International Space Station being one of the most far-
reaching).

The Disadvantages of Globalization

Because globalization is 100% inevitable, we must tell ourselves that the benefits outweigh
the disadvantages. But do they? It depends where you’re coming from, but let us first take a
look at what these disadvantages are before we form an opinion.

Competition: Someone Has To Lose

Unfortunately, while competition is generally thought to be a good thing, it does not come
without a sour side. If I were to say, “Some companies won’t survive because of
globalization,” then you might say, “Then they don’t deserve to survive; that’s the beauty of
it; the companies worth sticking around usually do.”

I won’t deny the truth in that, but what about the borderline monopoly that the largest
companies in the world have created for themselves? Apple, Exxon, Google, etc. Whereas
they were once innovators, they are now so big that politics and strategy are more important
than innovation. The result of this is that smaller companies with innovative ideas have an
incredibly difficult competing. And how can they? If they’re lucky, they’ll be bought out and
walk away with a pay check; if not, they’ll just be crushed, often purposefully, by a
competitor that is literally a billion times bigger than them.

Environmental Devastation

I hardly need to spell this out, but I will add a thought or two. Globalization has created a
global-sized need for energy and industry, and this need has been abused and ignored to the
extent that the future of life as we know it has been brought into question. You may or may
not believe in global warming, but you cannot deny the existence of the conversation. Does
the fact that this conversation is happening not say something in itself?

Have we bulldozed our planet into trouble? Obviously, yes. The argument against this fact
is that we could not possibly have caused so much destruction to our enormous planet. The
facts say otherwise: we’ve logged over half of the world’s tropical forests. Eg in
 Kenya And as far as how difficult it would be to change the composition of the atmosphere?
The atmosphere ends a mere 60 miles above the surface of the Earth. It’s just not that
voluminous. It’s not limitless. It’s actually small, and when we work together globally, even
the negative side effects of all the amazing things we accomplish are, in a word, globalized.

Good, Bad, Inevitable

Unfortunately, or maybe fortunately, globalization is simply and utterly good, bad and
inevitable. Hopefully the good will out-weigh the bad, but the continued existence of both is
inevitable. Because of this, we are better off accepting the truth and, like we do best, moving
forward. But make no mistake: environmentalism is gaining speed.

Positive and negative effects of globalization

Globalization refers to the overall development as well as modernization of a community as a

whole. The reason why globalization is important is because it helps a community in gaining
international recognition, influence as well as operation. This, however, can be projected in
both positive as well as negative ways. The debate on whether globalization is good or bad
for any particular community has been going on since ages and while some people stress on
the benefits of globalization; others pay more attention towards the compromises and risks of
achieving globalization. Without wasting much time, let us take a look at some of the
positives as well as negatives of globalization.

Positives of Globalization

1. Due to increased globalization in developed countries, there is more scope for developing
countries to benefit from it. This way they can lead themselves towards economic success
and ultimately achieve better standard of living as well.

2. Globalization also boosts the ongoing competition between countries all over the world as
well as within any particular country; hence making sure that prices of commodities are
lowered to a considerable extent. This is a great chance for all end- users to procure goods at
low rates.

3. Thanks to the reach and influence of media these days, increased media coverage helps in
drawing attention towards those parts of the world where human rights are violated for the
benefit of the rich and powerful. This leads to improvement in human rights.

4. When globalization takes place across a nation, it gets wider worldly exposure in the form of
food, movies, art, music, clothing, culture, etc. This is a great way of forming closer bonds
with the rest of the world.
5. Globalization in one country/ community leads to a sense of competition in others; hence
helping in keeping the prices of commodities under check during all times.

6. All developing countries can benefit from the already existing technologies without the need
to undergo the stress of developing any particular technology.
7. Globalization helps in bringing different governments together so that they can work
together towards achieving common goals; which is a great way of spreading global
awareness regarding common concerns and issues.

Negatives of Globalization

1. The most common drawback of globalization is that it is widening the gap between the rich
and poor; where rich people are becoming richer and poor are becoming poorer.

2. As a result of outsourcing, globalization may deprive an entire country of its jobs and
resources. This is because globalization takes jobs away from one country and provides it to
another country; hence leaving lots of people without the opportunities that they deserve.

3. Although people belonging to different cultures and countries get a chance to interact with
each other, it causes a loss in tradition and values.

4. As species are deprived of their non- native ecosystems, there are increased chances of them
spreading diseases and disrupting other natural ecosystems and their native species.