Pros and cons of globalization

Globalization is a multifaceted concept that represents the increasing integration of economics, communications and culture across the national boundaries. Do we see these integrations in our present World? The answer is, of course, yes. At present, a person, while sitting at home can purchase any product across the globe using digital applications and VISA card. Journeys of days have reduced to hours. Besides, it is also possible now for anyone sitting in one corner of the world to communicate, face-to-face, with another located in an opposite edge using Internet. It means globalization has already become a part of our life and the technology has given this concept a practical shape.

Globalization was further promoted by the US after the end of World War 2 under its new World Order. There is no second opinion in the fact that globalization made the US wealthy and increased its prestige in the globe because the US was advanced in technology and economic integration created easiness for it to sell its merchandise around the globe.

Globalization, without any doubt, has solved our day-to-day problems and created convenience to conduct trade and other activities smoothly. However, some opponents deride the concept for its lopsided benefits.

Undoubtedly, globalization comes with some pros and cons, which are described as below:

Cons of globalization

Opponents have raised the following concerns to reject globalization:

Inequality:

The major argument against globalization is that it causes inequality. According to opponents, globalization is more beneficial for the richer countries. The economic expansion of the US post World War 2 era and unequal distribution of wealth among the people can be cited to describe how globalization contributes to growing equalities. The Gross Domestic Product of the US increased from $228 billion in 1945 to around $1.7 trillion in 1975. By 1975, the US economy represented some 35% of the entire world industrial output. Besides, according to a new report, the top 1 percent now owns 50.1 percent of the world’s wealth, up from 45.5 percent in 2001. In the same period, the wealth of poor countries diminished and drained towards the rich nations.

Globalization increases inequality within developed countries as well. For instance, in the US, at present, 10 per cent American earns 47 per cent of the total wealth as compared to 34 per cent in 1980s.

The developed countries are advance in industrial technology and possess many merchandise to sell in the developing countries. On the other hand, the poor countries merely make anything to get advantage of integrated economy. It is, therefore, their wealth is draining towards the rich countries to make them further richer.

Jobs loss in the developed countries:

Globalization also results in unemployment. China has now started to gain benefits from globalization and integrated economy in the same way the US did earlier. It has not only established industries, but also exploited its huge population to create a low-cost labor and to make finished goods at competitive price. Consequently, it has started to export its inexpensive articles to the US. Chinese total trade with the US was only $8 billion in 1985. In 2017, the export of China to the US alone stood at $479.7 billion contributing $419 billion trade deficit for the US.

As a result, Americans lost 40 per cent jobs in the manufacturing sector owing to surge in import from China. Industries started to close there because China provided the same goods at a reasonable rate that was produced in the local industries.

Besides, immigrants are replacing the local people from their jobs because they usually agree to work for low wages. It was the reason that the Britain left the European Union to ensure job security for its local people.

Lowering the Income:

Globalization has created a competition among the countries. As a result, income of some workers has badly affected. The most serious impact is felt on the people of America who achieved more benefits from it during early period. For instances, American born in 1940s earned 90 per cent more than their parents. However, American born in 1980s earn 50 per cent less than their parents and it is due to capturing of economic markets by China.

Monopoly of multinational companies and eradication of culture:

Globalization is also criticized for creating a monopoly of some multinational companies in any country. According to opponents, these companies not only take a lion share of their profits, but also exploit the local citizens by paying them low wages. The local culture is also affected by integration of the foreign traditions. As a result, the new generation is fast loosing its indigenous cultural values by adopting the Western customs owing to globalization.

Pros of globalization

Globalization does more good than harm. The fast growth of global economy and improvement in the lifestyle of people is because of globalization. Some major pros of globalization are mentioned as follows:

Importance of the multinational companies:

The investments by the multinational companies always prove beneficial for the receiving country. It creates job opportunities for the local people and help exploit its natural resources. It improves the export of the country and contributes to its taxation system. For instances, investment under China Pakistan Economic Corridor (CPEC) by different multinational companies have already created around 75,000 new jobs in Pakistan and is expected to create 2.3 million more by 2030.

The example of the US can also be cited here. Kenneth F. Scheve and Matthew J. Slaughter wrote in the foreign affairs magazine in 2018, “In 2015, they [multinational companies] spent $700 billion on new capital investment, 43 percent of all private-sector nonresidential investment in the United States; exported $794 billion worth of goods, 53 percent of all U.S. goods exported; and spent $284 billion on research and development, a remarkable 79 percent of total U.S. private-sector R & D. That translates directly into good jobs. In 2015, U.S. multinationals employed 28 million Americans (making up 23 percent of all private-sector jobs), paying them a third more than the average private-sector job.”

Quality material available at a relatively affordable rate:

Globalization enables consumer to get a quality material at an affordable rate. It is a fact that globalization increases the competition among the industrial country to occupy markets. As a result, the competition forces the producers to bring down the price of their finished goods. Consequently, the consumers get a low-priced product. It can be further explained by citing an example of the US and Chinese competition at the global level, China has lowered the prices of its merchandise to occupy more markets. As a result, the US had left with no option but to contract the prices too. Hence, the local consumers end up getting a quality product at an economic rate.

Improves the lifestyle of the people:

Globalization also improves the lifestyle of the people. It creates an opportunities for young generation to conduct trade activities around the globe and improve their economic position. For instance, people living in Africa can earn millions of dollars by making YouTube videos. For example, Mark angel is a Nigerian comedian. He earns good amount of money required to improve his lifestyle by just making and uploading his videos on YouTube. Had there been no globalization, he would have spent a miserable life in Nigeria.

Importance of immigrants:

Immigrants bring with them innovations and expertise. They contribute to the development of the receiving countries. For instances, Kenneth F. Scheve and Matthew J. Slaughter writes, “Immigrants, only 13 percent of all U.S. residents today, made up 39 percent of the U.S.-resident Nobel Prize winners in chemistry, medicine, and physics over the past 20 years.” It is estimated that Immigrants founded the most of the largest companies of the US.  One recent study by the Kauffman Foundation concluded that immigrants accounted for 25 percent of all new high-tech companies founded in the US from 2006 through 2012.

Globalization contributes to the global peace:

It is a known fact that globalization contributes to global peace in various ways: firstly, it engages nation in trade activities. As a result, the countries try hard to maintain peace in the globe because they know that the insecurity will directly affects their business. For instance, China is working hard to bring peace in South Asia because it knew the fact that its Belt Road Initiative (BRI) cannot be succeeded without peace in the region. Secondly, globalization improves the lifestyle of the local people by creating job opportunities for them. Hence, the local citizens also try to avoid clashes.

Globalization promotes democracy:

The integrated communication has given people free access to millions of international web sites. The knowledge and information available online develop their interest for the civilian rule. Out of fear, Chinese government has blocked the access of its citizens to different web sites. Beijing fears that these people will raise voices against the authoritarian rule once given free access to Internet knowledge. North Korea has taken a step ahead by strictly limiting the use of Internet by local people. Thus, globalization helps in promoting democracy by increasing the access of people to knowledge.

Conclusion:

Thus, globalization involves the integration of the world. The globe has already been amalgamated after the advent of technology. The integration has resulted in both pros and cons. However, the pros surpass the cons. According to opponents of globalization, it causes inequality, jobs loss, monopoly of multinational companies, eradication of culture and lower income. The supporters believe that the multinational companies and immigrants are always beneficial for any country. Besides, according to them, globalization provides quality goods at an affordable rate, improves the lifestyle of people, contributes to global peace and promotes democracy. Thus, globalization has more advantages than disadvantages and must be promoted.