The Pros and Cons of Globalization | Marianopolis World Review
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March 2016

The Pros and Cons of Globalization

28/03/2016

GLOBALIZATION: THE GOOD, THE BAD, AND THE (MOSTLY) UGLY

Since the end of the Second World War, the world economy has seen a level of growth unparalleled in human history. Many economists accredit this surge in international trade and prosperity to the policies that gave rise to the globalized market we benefit from everyday. However, while it is true that globalization has kept consumers in developed countries complacent with cheap goods and services, economists are looking at a flawed model for the future of world trade.

Categorically, there are serious ethical, and viability concerns that plague the so-called “gold standard” of global commerce. Firstly, globalization forces good paying, local jobs to relocate to countries that may lack labor laws. Essentially, this forces North American workers in most exporting industries, such as manufacturing and energy, to compete with their Mexican, Chinese, or Indonesian counterparts —who make a few pennies or dollars a day. This unfair competition does two major things: it prevents skilled workers from accessing decent job opportunities, and encourages the mistreatment of laborers in developing countries.globalization_bad

Secondly, the globalized economy prevents any real progress in reversing the effects of climate change. Companies grow uninterested in paying more to meet environmental protection standards and relocate their operations to jurisdictions with absent eco-friendly legislation in order to maximize profits. Not only does this destroy local communities in these areas by pumping toxins into the air, water, and ground, it also prevents governments from adopting significant green initiatives out of fear of driving out business.

Thirdly, globalization relies on the idea that labor and raw materials are in infinite supply; Just as our economy grows, so does global consumption and waste. For example, the average North American consumes at rates that would strip the world of all its natural resources if generalized to the global population. It is clear that the world economy as it stands emboldens a lifestyle of immoderation and overindulgence.

Lastly, a globalized economy ties countries together through dependencies. This can be dangerous for two reasons: if the system fails, countries will lack essential goods and services, and if there is an outright failure, the repercussions will ripple throughout the world. The latter was best observed in the 2008 financial collapse which resulted primarily from the US subprime mortgage crisis. An example of the former is the 1970s oil crisis where the Organization of Arab Petroleum Exporting Countries (OAPEC) placed an embargo on US oil export, which eventually drove the American economy into a recession.

Ultimately, we should not settle for an economic model that drives the cycle of poverty, that allows the environment to continue to deteriorate, that desensitizes us to the realities of finite resources, and that imperils us when disaster strikes half a world away. One thing remains clear, the system in which globalization has been allowed to thrive in is deceiving; The deal that world leaders and lobbyists marketed is not the fiscally responsible, sustainable package they sold to us. No doubt, globalization had a necessary role to play and led to the amassing of great wealth, but the economy of the future will require us to reconsider the value in dynamic, local economies that can preserve and enhance our way of life in the 21st century and beyond.

Written by MWR writer Yanni Stavrakis, edited by the MWR team

GLOBALIZATION AS A SUSTAINABLE AND RELIABLE ASSET IN THE INTERNATIONAL MARKET ECONOMY

Globalization is not a new phenomenon, it has been around since the time of the Romans and their innovative trade routes, to the fall of Constantinople, once giving access to the spices of the East, that pushed explorers to reach the far corners of the New World. While globalization hasn’t always been associated to it’s benefits, it proves to be a sustainable and reliable asset in the international market economy. Not only has globalization made us richer, it has made us more culturally diverse, more educated, and has increased the quality of goods and services we consume while reducing their cost.

GLOBALIZATION HAS MADE US RICHER

Most European and North American academic economists would agree, as they have successfully argued, that governmental regulations diminish prosperity by limiting growth. In fact, by allowing production to have a more diverse background than before we have increased the world’s economic output. Some may argue that it has only helped to increase the wealth of already rich countries and individuals, or even that it takes away jobs for the low-middle class in those countries. However, companies that move their manufacture globalization_by_guille3691from high to low income countries help a greater number of people to receive better living standards, or more plainly, that get better off than they were before. Without implying a direct causal relationship, in the past 30 years, which saw the greatest surge of globalization thanks to the increase in technological advances, 600 million people have emerged from poverty. By finding jobs in safe and regulated manufactures, populations have been able to ensure a more secure, healthier, and richer future for themselves and their children. Furthermore, around 25 million people around the world living in a different country than the one they are a citizen of have been found to send back money to their families. Indeed, remittances, which is the pay that workers often send from a high income country to a lower income country, is, in competition with international financial aid, one of the largest contributors to monetary inflow in low income countries. In Tajikistan, for example, remittances represent 35% of the total GDP, and in 2015, the World Bank estimated that remittances reached $440 billion in developing countries.

GLOBALIZATION HAS MADE US MORE CULTURALLY DIVERSE

It would be an understatement to simply say that globalization has increased global communication, because it essentially has created what experts call a ‘global village’: a community of people from different nationalities, speaking different languages, with different cultural and heritage backgrounds, that has enabled us to become more tolerant and open to different peoples. Some opponents of globalization have stated that globalization has ‘Americanized’ other cultures, and while American products, like the series Friends or Diet Coke, are accessible nearly everywhere, we could also say the same thing about a number of other cultures. When was the last time you ate sushi for lunch, ordered Chinese take out for dinner, or went out to a tacos place at 2 am? Not only is culturally diverse food becoming more and more accessible, so is cinema. In an article for the Wall Street Journal, Micheal Lynton, chairman and CEO of Sony Pictures Entertainment, remarks: “Citizens of other countries also like their own heroes and villains, actors and directors. They want to see stories, stars and issues that relate to their own societies and are portrayed and examined in their own languages. That’s why, in recent years, we have seen an explosion of creativity from outside Hollywood.” Not only has entertainment been improved, so has tolerance. By increasing contact between people of diverse backgrounds and identities, we effectively become more tolerant, and more importantly, understanding of communities that are not our own. Globalization, through exposure and representation has bettered the lives of women, given greater respect to human rights, and lessened stigmatization towards people living with HIV/AIDS.

Nonetheless, while the downsides of globalization weren’t addressed in this piece, it would be imprudent to believe there are none. However, when we look at everything globalization has given us, and the ways it has corrected itself thus far, we can effectively say that globalization is a sustainable and reliable asset in the international market economy.

 

Written by MWR writer Laurence Doucet, edited by the MWR team