Pros and Cons of Globalization
In this article, we shall examine the pros and cons of globalization. Globalization, or the increased interactions between individuals with regards to issues such as trade and communications, has been a strongly debated issue in international relations. We will lay out and evaluate the different arguments in the debate on globalization. We will look the arguments that supporters of globalization make, as well as what the critics say about globalization.
Globalization
Globalization has within it a number of characteristics such as “the international flow of ideas and knowledge, the sharing of cultures, global civil society, and the global environmental movement” Stiglitz, 2007: 4). However, many also examine globalization from the points of economics and political economics. Globalization from the perspective of economics is the “economic integration of the countries of the world through the increased flow of goods and services, capital, and even labor” (Stiglitz, 2007: 4). Or, the International Monetary Fund (1999) defines globalization as “the growing economic interdependence of countries worldwide through the increasing volume and variety of cross border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology” (in Osland, 2003: 138). And as we shall see, according to some scholars, the pros and cons of globalization often stem from what sort of globalization, or what aspect of it, we are examining.
Globalization has been a point of contestation amongst various international actors. For example, as the 2004 World Social Forum, human rights organizations, and individuals congregated to talk about globalization, what what it is doing to human rights and power relationships in the international system. For example, Joseph Stiglitz (2007), in the first page of his book “Making Globalization Work” states that “I believe globalization has the potential to bring enormous benefits to those in both the developing and the developed world. But the evidence is overwhelming that it failed to live up to this potential. This book will show that the problem it not with globalization itself but in the way that globalization has been managed. Economics has been driving globalization, especially through the lowering of communications and transportation costs. But politics has shaped it. The rules of the game have been largely set by the advanced industrial countries–and particularly by special interests in those countries…” (4). He goes on to say that these special interests have organized the system in a way that benefits them and what they care about, although unfortunately at the expense of individuals in the global south, and what is best for them.
Again, part of the difficulty to determine whether globalization has been a positive or negative force stems partially from how we define globalization. Usually, when people speak about globalization, they are doing so with the idea that we are speaking about economic globalization. And while that is clearly a central element of globalization, for some, that is not their primary focus when they are either supporting or criticizing globalization. For example, they may be speaking not so much about economics as they are about other socioeconomic issues, cultural issues, or more direct environmental issues (Champlin & Olson, 1999, in Osland, 2003).
History of Globalization
Historically, the debate on globalization, while always there, was starting to happen even within global north states. Now, many human rights activists and individuals in economically developing states warned about the dangers of globalization, or more specifically, the actions of economic powers (be they states or businesses), and what those decisions would do to the global south, which at times came in the form of some sort of human rights or environmental violations. But, in the early 2000s, such as at the 2004 World Economic Forum at Davos, many were raising the question about what globalization could actually do; did the reality of globalization fit with what some were promising would happen with an increasingly globalized and interconnected world (Stiglitz, 2007).
Interestingly, ever since the topic of globalization has made headlines, and ever since it has occupied so much time in academic and policy circles, there have been questions about the pros and cons of globalization. In the late 1980s, and the early 1990s, many were quite optimistic about what globalization would bring in terms of economic development. As early as the late 1980s, states were pushing for economic trade liberalizations. Much of this was through what was known as the Washington Consensus. Furthermore, in the mid nineties, states came together to form the World Trade Organization, which was seen to further aid in terms of free trade and economic liberalization (Stiglitz). However, with the WTO meeting in Seattle in attempts to further advance economic free trade agreements, the WTO was met with strong resistance by protesters in Seattle, which is seen as one of the most important anti-globalization movements to date.
General Criticisms of Globalization
There are many who have found a number of criticisms of globalization. For example, Stiglitz (2007) summarizes some of the concerns by those worried about the rise of globalization. He points to a handful of criticisms:
- The rules of the game that govern globalization are unfair, specifically designed to benefit the advanced industrial countries. In fact, some recent changes are so unfair that they have made some of the poorest countries actually worse off.
- Globalization advances material values over other values, such as a concern for the environment or for life itself.
- The way globalization has been managed has taken away much of the developing countries’ sovereignty, and their ability to make decisions themselves in key areas that affect their citizens’ well-being. In this sense, it has undermined democracy.
- While the advocates of globalization have claimed that everyone will benefit economically, there is plenty of evidence from both developing and developed countries that there are many losers in both.
- Perhaps most important, the economic system that has been pressed upon the developing countries–in some cases essentially forced upon them–is inappropriate and often grossly damaging. Globalization should not mean the Americanization of their economic policy or culture, but often it does–and that has caused resentment (9).
We shall examine the pros and cons of globalization within the context of these different issues.
Globalization and Equality
Supporters and critics of globalization have debated whether globalization fosters greater equality, or whether globalization furthers economic and social inequalities. Advocates of globalization argue that globalization offers a number of opportunities for individuals. Osland (2003: 141) lays out a number of points that proponents of globalization make: These points are quoted below:
Income increased globally for both rich and poor, decreasing poverty.
Increased wages for the well educated
Increased wages for technologically skilled
Improved economic conditions in countries and regions that successfully compete in the global economy
Rich have become richer
Increased access to more goods
Reduced prices due to competition with local monopolies
Increased food supply in some countries
Globalization and Inequality: Poverty
One of the criticisms outlined above focuses on the issues of globalization and poverty. With regards to the debate on the pros and cons of globalization, the critics of globalization have emphasized the negative effects of economic liberalization with relation to poverty figures. They argue that globalization has not helped people out of poverty, but has actually moved more people into poverty. As Stiglitz (2007) explains, minus cases such as China, poverty in the developing world has increased over the past two decades. Some 40 percent of the world’s 6.5 billion people live in poverty (a number that is up 36 percent from 1981), a sixth–877 million–live in extreme poverty (3 percent more than 1981). The worst failure is Africa, where the percentage of the population living in extreme poverty has increased from 41.6 percent in 1981 to 46.9 percent in 2001. Given its increasing population, this means that the number of people living in extreme poverty has almost doubled, from 164 million to 316 million” (11).
Osland (2003), in reviewing the literature, states that there are some who have benefited from globalization, whereas other have suffered during globalization. However, what seems to be rather consistent is this overall inequality gaps have grown. There are widening gaps between economically rich states and economically poor states. This can be seen by per capita income, the percentage of GDP economically rich states have compared to economically poor states, and overall ownership of wealth. In addition, income for the poorest in the world has continued to decline, with income for the rich rising. Thus, some critics “object to globalization that makes some elite countries and groups much better off than others, even if all gain on average” (Elliot, Kar, & Richardson, 2002: 21-22).
However, we find growing economic disparities not only between countries, but within countries as well. One needs to look no further than the economic discrepancies within the United States. From the 1970s to the early 2000s, for example, the United States has witnessed a decline in the economic worth of hourly pay, all the while seeing a vast increase in CEO pay (Osland, 2003). Furthermore, the richest one percent continue to own more and more of the total wealth in the country (Osland, 2003).
Thus, with the rise of globalization, as Osland (2003) explains, “it does seem safe to conclude that it has produced winners and losers on both the individual and country levels. The increasing gap between the haves and the have-nots raises the question of fairness” (140).
Globalization and Labor
Along with questions about the effects of globalization on poverty, there are also numerous questions about globalization as it relates to labor rights. For those who believe that globalization benefits labor, they argue that there are new opportunities for those who may not have had access to certain types of employment beforehand, that globalization has allowed businesses to invest in countries that would benefit form the need to hire individuals. Furthermore, not only will there be more jobs, but those who are working will also benefits because of more access to education and job training, which can provide them with a larger skill set (Osland, 2003).
However, there are many who are quite concerned about globalization, much of it related to their job security. With globalization, companies are not able to compete for labor; were a company might once have been limited to workers within one country (which could have affected supply), now a company could move their factories and business to another country with far more supply of labor, which will be a lowering of demand in labor. Thus, those who are looking for security in their employment may feel worried about losing their jobs to someone elsewhere. Globalization has allowed business to be international. This includes the ability to hire abroad. Furthermore, not only are people losing jobs, but those that are losing them now have to often work in fields that might not be what they preferred (Daly, 1996, in Osland, 2003).
Many others point to human rights violations as related to to labor as a fundamental problem with how businesses operate in this globalizing world. For example, “[t]he labor movement and human rights advocates argue that globalization has had a negative effect on labor standards and that it threatens hard-won improvements in labor conditions. They warn about the race to the bottom, which assumes that competition will drive labor standards (and also environmental standards) to the lowest common denominator” (141). The race to the bottom is this idea that businesses (multinational corporations) will look for the cheapest places to conduct businesses, even if it means that human rights will not be protected. And by them looking to invest their capital–something possibly hard to come by in the global south state vying for their business–these leaders of the economically developing states will attempt to establish attractive options for the MNC so that they will invest in their state. This might take the form of significant tax reductions , or weak environmental or human rights standards, with the hopes that this would help the MNC decide to choose their country. However, other states are also offering incentives, and in order to keep up with the offers of the other states, will in turn make similar offers. With multiple states doing this, there is a “race to the bottom” in terms of how rights will be affected; states will offer great autonomy for the MNCs, and little interference, which may include doing little when an MNC violates human rights or harms the environment.
Thus, when states ignore human rights, and MNCs invest in countries with little human rights standards, then citizens lose. They do not have high wages, they do not have realistic job security, and they do not have government protections against any MNC actions. Thus, many have reported MNCs that have abused human rights by not providing adequate wages to their employees. Or, in other cases, the work conditions may not be safe for employment. Other times, there have been reports of individuals threatened when wanting to form a union. In addition, at times, people have been made to work long hours, and sometimes without breaks. As Osland (2003) explains,
“The form of ownership and the transitory nature of many overseas factories have resulted in a different form of social contract between employer and employee. The reliance of some multinational enterprises non local subcontractors who run their factories means that workers do not “belong” to the company. This arms-length relationship facilitates the closure of factories when labor costs rise prohibitively and another country becomes more attractive. In these cases, the social contract between employer and employee is limited to the simplest, most expedient transaction—pay for work, which is a stripped-down version of the social contract that exists in most developed countries (albeit with the exception of temporary workers). There have been instances of unscrupulous foreign factory operators in export processing zones who have closed down and fled the country without any warning or termination pay to employees” (142).
These are not straw man arguments, but rather, activists says have been common occurrences throughout the history of MNC investments (in factories, for example) abroad.
Globalization and Governments
Scholars have debated the effect of globalization on governments. The question people are asking has to do with the level of power that states have, particularly on economic issues, and particularly as it relates to multinational corporations (Osland, 2003), who, some believe have rising power in the international relations system.
Advocates for globalization as it relates to governments argue that the rise of technologies, and the increase in interconnectedness is great for the individual in the international system, even if it is bad for the government. The individual not has the power to bring about political change. Thus, in authoritarian states, the individual can organize outside of the view of the government, and thus, work on democratic reform. This was recently evident with the 2010-2011 Arab uprisings, where individuals used social media to help organize protests against the state. However, on the other hand, that same power can be used for evil. Individuals have the ability to commit crimes with the very same technology.
There are also debates on what it does to the functioning ability of the state. For example, [o]n the positive side of the ledger, for some governments, globalization has resulted in expanded infrastructure, more jobs, and more economic development for their citizenry. Certain countries have benefited from the transfer of modern, more effective management techniques to their business sector. Furthermore, some observers believe that the increased interdependence of trading and investment partners will draw countries closer together and serve as a deterrent against war (Harris & Goodwin, 1995; Tyson, 1999, in Osland, 2003: 143).
However, many believe that states have also had to give into the multinational corporations, thus weakening their political and economic sovereignty. This can be in many forms. States might be open and influenced by MNC lobbyists for example, who want to push a particular agenda within that government. In addition, they may also put pressure on states to ignore human rights in the name of their own economic interests (Soros, 2002, in Osland, 2003). Furthermore, many have also been critical of the ability of MNCs to influence other economic policies of states. Many have been critical of international organizations such as the World Bank, International Monetary Fund and the World Trade Organization (Osland, 2003).
Globalization and Culture
Another issue within globalization has been its effect on different communities and cultures throughout the world (Osland, 2003). Advocates of globalization point to the increase in information, which in turn has become available to billions of people throughout the world. Without globalization, it would have been difficult to find out about certain ideas or texts, for example. Now, with globalization, individuals are able to access movies, music, and sports from different countries and cultures. Furthermore, globalization has allowed collaborations at high levels; people from around the world can connect to create art, or to start up an organization, for example.
However, the flip side to this is that some worry that globalization will lead to a dying out of many cultures and languages, at the expense of a few top influencers. As the world becomes more global, and as culture is shared throughout the world, the question is how will this affect other cultures, particularly if they do not have as much influence, such as U.S. culture, for example. Thera are concerns that languages will not longer be used, and that we will move towards a unified type of culture, which will look less like a mix of various cultures, but rather, a dominance of one, or a few cultures.
Globalization and the Environment
Even the discussion on globalization and the environment has produced arguments in favor of globalization (i.e. the benefits of globalization with regards to environmental practices), as well as a great deal of criticisms. In fact, this seems to be on one of the often cited points that critics of globalization bring up; they feel that globalization has led various actors (most MNCs to) negatively alter the environment. The advocates of globalization with regards to the environment point to certain strategic production choices, as evidence that globalization can help environmental issues. For example, because globalization has now structured the economic system in which businesses have to compete not only domestically, but internationally, there are those that argue that it forces actors to be more selective in what they produce; they will focus on that in which they have a comparative advantage (Osland, 2003), since it will not be in their economic interests to devote resources to other products, which may be better produced elsewhere. Furthermore, it has also been pointed out that international law has developed greatly on the issue of the environment, and this can at least in part be contributed to political globalization; states have a platform (at the United Nations, for example), to work on these issues. There have been a number of legal and political advancements on the issue of environmental rights in the past decades. Plus, with increased technologies, actors are better able observe any environmental issues, and can respond more effectively (Osland, 2003).
However, critics of globalization (or how actors behave in a more globalized system) argue that one of the primary issues that is negatively impacted as a result of globalization is the environment. As Stiglitz (2007) states, “[a]failure of environmental stability poses an even greater danger for the world in the long run…Unless we less environmental damage, conserve on our energy and other natural resources, and attempt to slow global warming, disaster lies ahead. Global warming has become a true challenge of globalization…There will be grave problems ahead if everybody emits greenhouse gases as the rate at which Americans have been doing so” (17). He goes on to say that “[t]he good news is that this is,by now, almost universally recognized, except in some quarters in Washington; but the adjustments in lifestyles will not be easy” (17).
Global Feminism and Globalization
Some scholars have also examined globalization from the perspective of feminism. For example, many have looked at the role of women’s rights organizations, as well as female labor in the international economic global system. There have been arguments that women have been largely ignored in a lot of the globalized capitalist process, but also that women’s rights organizations have formed, and are very active in challenging gender biases (Moghadam, 2015).
In fact, women’s rights groups are at the forefront of bringing about positive change with regards to globalization and the international economic system. For example, as Moghadam (2015) writes, “Organized and mobilized women–locally, nationally, and transnationally–are raising questions about social and gender arrangements and making demands on employers, governments, and patriarchal movements, and international financial institutions” (104). And when one looks at the international landscape, it is quite evident that women’s rights groups have done a great deal to advance human rights and other related issues. For example, they have publicized rights abuses against women in many countries around the world. Furthermore, they also successes in putting pressure on international organizations such as the World Bank (and other international organizations) to include more attention to issues of gender within the economic work of the organization (Moghadam, 2015), and have succeeded in having such organizations (like the United Nations, among others) to focus on the work such groups are doing (Moghadam, 2015).
Overall, within the space of globalization, “women’s organizations have become major non state political actors on the global, regional, and national scene. They are in a dynamic relationship with states, the media, international governmental organizations, and other transnational social movements (TSMOs) and transnational activist networks (TANs). They use the global, intergovernmental arena and the transnational public sphere to accomplish national priorities in the areas of women’s human rights…and economic policies…, as well as to influence international norms and conventions” (Moghadam, 2015: 106).
Critics of Globalization
As mentioned above, there have been many critics of globalization. However, according to Elliot, Kar, & Richardson (2002), there various categories that can help when trying to understand who the actors against globalization are.
These individuals agree that one of the problems with globalization is their belief that “the process by which globalization’s rules are being written and implemented is undermining democracy, at both the national and international levels” (2). These scholars argue that there are a few areas of coalescence with regards to activists speaking out on issues of globalization. They are those criticizing MNCs’ disregard for the environment, for human rights (which include labor rights discussed above), and overall inequality, focused (although not solely limited to) global South states (2).
In order to try to work on discussing and addressing critics’ concerns, Ellior, Kar, & Richardson (2002) write that “[o]ne step in moving beyond the dialogue of the deaf is to orient the critics’ concerns in terms of potential market failures that economic analysis already recognizes. A second is to recognize that not all of the critics are “anti-globalization.” Some are, but others are not . With the end of the Cold War, some see anti-globalization as a new front in the long-running battle between socialism and capitalism. But other critics, including many with a religious orientation, are strongly internationalist and want to see globalization succeed, albeit under different rules” (3).
As mentioned, there are many ways in which activists work on issues of globalization. Some can be activists who are looking to confront MNCs or state actors more directly, such as protesting in front of govnerment or MNC buildings, or taking to the streets, such as was the case in Seattle in 1999. Others can work on improving human rights and environmental issues though the joining of non-governmental organization (NGOs). Here, they can team up with other individuals, and can promote their cause, donate finances, spread the word about initiatives, organize speaking events, or donate financially to their respective causes.
Others may carry out research (Elliot, Kar, & Richardson, 2002). This can be done through policy papers, academic works (and presentations in academic conferences), or other small or large scale research projects. Research can be quantitative or qualitative in nature, and thus, some collect and analyze statistics, whereas others focus on interviews with political leaders, corporations (if possible), or those who have had their human rights violated.
References
Champlin, D. & Olso, P. (1999). The impact of globalization on U.S. labor markets: redefining the debate. Journal of Economic Issues, Vol. 32, No. 2, pages 443-451.
Daly, H. (1996). Beyond Growth. Boston, MA. Beacon.
Elliot, K.A., Kar, D. & Richardson, D. (2002). Assessing Globalization’s Critics: Talkers Are No Good Doers? Available Online: http://www.iie.com/publications/wp/02-5.pdf
Harris, J.M. & Goodwin, N.R. (1995). A Survey of Ecological Economics. Washington, D.C. Island Press.
Moghadam, V. (2015). Chapter 7, The Specter That Haunts the Global Economy?, pages 103-110, in Steger, M. The Global Studies Reader. New York, New York. Oxford University Press.
Osland, J.S. (2003). Broadening the Debate: The Pros and Cons of Globalization. Journal of Management Inquiry, June 2003, No. 2, 2, pages 137-154.
Soros, G. (2002). George Soros on Globalization. New York, Public Affairs.
Tyson, D.L. (1999). Why the US should welcome China to the WTO. Business Week, 30. May 31st, 1999.
