Globalization Pros and Cons List
While many have heard the term globalization during news reports or televised debates, it can be challenging to suss out all of the attendant pros and cons. As the Internet continues to shrink the world we live in, globalization becomes more and more important. For those who are unaware, globalization is the process of shifting the world we live in from a place of isolation to a place of integration. It signals a greater economic and political cooperation worldwide and an increased sharing of ideas. Thanks to technological advances, globalization has become a greater reality.
List of Pros of Globalization
1. Free Trade
Once upon a time, nations were not able to trade freely with one another, due to all of the barriers that stood in their way. Companies in varied nations across the world are now able to trade with another, thanks to reduction of restrictions on importing and exporting.
2. The Consumer and Economy Benefit
Consumers are able to lower their costs and enjoy a much wider selection of products to choose from. Now that foreign companies can reach those who do not reside in their country, they are able to tap into markets that they were unable to reach before.
3. Competition Between Countries Drives Prices Down
The companies have greater access to more countries, which allows them to sell their goods and services to wholesale retailers all around the world.
4. Gives Other Nations Opportunity
A nation the opportunity to hone in on their strengths, while ignoring their weaknesses. A country that is rich in oil, but possesses a scarcity of suitable farm land is free to focus on exporting their plentiful oil supply. Because they do not have to worry about importation restrictions, they can easily purchase wholesale amounts of fresh foods from other countries.
5. Labor Can Move More Freely
Workers can move from country to country with relative ease and market their skills, goods and services to the highest worldwide bidder. Countries no longer have to suffer with gaps in their labor structures. A nation that is struggling to produce doctors can simply import them from another country. Shortages of labor are no longer an issue on a local level. Thanks to the increased ease of communication and the reliability of the Internet, a person can be trained to work at a job in a foreign country without actually being present.
List of Cons of Globalization
1. Smaller Countries Suffer the Most
While there are a variety of benefits, countries have struggled with certain globalization concepts. Certain nations benefit greatly from the current landscape, as others suffer. Smaller, less developed countries do not typically benefit from the level playing field that globalization provides.
2. Leaving Developing Countries Behind
Economists have argued that developing countries are at increased risk of being left behind. Globalization encourages free trade, which does not provide a developing nation with the protection that they need in order to grow.
3. Strain Among Job Markets
The free movement of labor also has its downsides. When workers can move freely from one nation to the next, countries that have a dearth of job opportunities often struggle. Skilled employees do not often stay in countries without a strong job market, which can cause a labor drain.
4. Inability to Recoup Investment
For countries that rely on public funding for their secondary educational system, this can be disastrous. Residents of the country utilize publicly funded colleges to bolster their skills for the job market, then take their talents to other countries. This leaves their home country with very little recourse to recoup their considerable investment.
5. Companies Seeking Personal Gain
Larger companies have learned how to leverage globalization for their own personal gain. Companies now have the ability to trade with countries that they are not based in. This allows them to exploit certain tax loopholes and hide money in places like Ireland and Hong Kong. When this happens, the countries that they are based in lose out on billions of tax dollars. The consumer is then squeezed by increased taxes on their goods, services and property. A nation typically has zero control over larger corporations registering in other countries to avoid taxation.
6. Negative Impact on Environment
The environment impact of globalization is considered to be negative by most experienced observers. The increased consumption of a wide variety of products leads to increased production which causes an uptick in pollution. Simply put, the environment is under added strain, which can have devastating long term effects on the planet’s environmental stability.
7. Loss of Cultural Identity
Greater cultural hegemony is benefit, but countries are beginning to lose their identities due to immigration that is taking place on a progressively larger scale. As globalization becomes the new way of the world, more and more countries are at risk of losing their cultural identity.