The Pros and Cons of Globalization

Globalization has been with us for a long time in one shape or another. Trade routes have been operating between different parts of the world since ancient times. In the 15^th 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 South East Asia.

The latest phase of 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 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, which meant that somebody sat at a regular PC with a connection to the internet could carry out work for almost anyone in the world, often in ‘real’ time.

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.

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.

Productivity grows in countries that open up their markets and integrate with outside economies, as they 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.

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.