Globalization in Reality

Critics will argue that globalization is exploiting children and workers in developing countries, creating inequalities in the distribution of wealth and outsourcing jobs. However, the overall benefits of globalization in the preceding decades far outweigh many of these perceived dangers and it can be argued that such statements have little basis in reality. Globalization means a decrease in trade barriers and regulations and an increase in international trade which in turn stimulates economic growth. The global economic GDP has increased exponentially as various countries have moved towards a liberal marketplace and opened their borders to freer trade and globalization. The ‘Commanding Heights’ documentary illustrates the effect of free trade on economic growth aptly through the examples of China and India who moved from highly regulated states to liberal markets and saw unprecedented growth in their economies. It has also been suggested that if all global trade barriers were removed, world GDP would expand by $2 trillion and the United States alone would see a $497 billion increase in their GDP.

As borders and barriers are broken down, our markets are opened up to cheaper and better quality products. Lester Thurow points out that deregulation forces prices to go down because production costs go down. Lower costs are also a result of increased competition as companies are compelled to lower their prices further than they would under protection from international competition. Lower costs translate to higher living standards for citizens of countries participating in globalization as their incomes will extend further and they will be able to purchase products previously out of their reach.

Socially, globalization has encouraged greater integration and removal of cultural barriers. Our lives have been enriched by a greater variety in cuisine, literature and travel. Mass media, the internet and global communication have opened up vast new opportunities never envisioned before. Iconic names like Facebook, Skype, CNN and BBC are part of this process of globalization and are drawing the world closer together everyday. Many people, particularly youth, are embracing these changes and accepting them as the standard in their lives. Whether or not globalization can be considered inevitable, it has significantly altered the dynamics of our society and it would be difficult to reverse the process without causing serious disadvantages and upsetting a large section of our population.

As cultural barriers are broken down, critics argue that those in poorer countries are being exploited and that wealth is being concentrated in the hands of a few. However, research shows that from 1975 to 2001, developing countries saw a 2.3 percent increase in per capita income compared to a 2.1 percent increase for Organization for Economic Co-operation and Development countries. There is also a certain amount of logic missing from the argument that we should not trade with countries that have poor labor records. There are very few jobs in these developing countries and closing down multinational companies does not mean these workers will go elsewhere for a better job. Realistically it means they will have no employment and no income. Through globalization, perhaps companies and wealthier governments can use investment to steer developing countries to improve their work and living standards.

Other critics of globalization do not like investment in developing countries because it can mean outsourcing, which they see as detrimental to their own society. It cannot be denied that outsourcing does mean loss of employment for some. However, as a whole employment has not been adversely affected by free trade. In fact evidence shows that employment in trading firms increases more rapidly than non-trading firms and that overall employment is much higher than it was a decade ago. Income levels are also much higher, with the median household income 6 percent higher than a decade ago. Therefore, while outsourcing may hurt some individuals through job loss, overall employment in America is up and globalization is stimulating job growth.

While issues like outsourcing and poor labor records in developing countries appear to be negative aspects of globalization, in reality it is more complicated. Globalization can be credited with unprecedented economic growth, lower costs for consumers, higher rates of employment, better standards of living in developed and developing countries and social and technological innovation. Without globalization our lives would be vastly different from what they are now. Critics would be wise to look at globalization as a tool for improving living conditions in developing countries and influencing local governments to improve standards for their people. As markets take care of economic growth and stimulation, perhaps governments will then be able to turn their resources and attention to other issues such as education, health care and environmental protection.