Reasons For Against Globalization Economics Essay
Globalization means that the international integration arising from the interchange of products, culture, ideas, and world views. Globalization refers to the interplay across cultures of macro-social forces. The forces may involve about religion, economics and politics. In fact, there are many arguments against or for globalization; in this essay, I will use the economics level to analyze whether globalization is a good or bad phenomenon.
Reasons for Against Globalization:
First of all, Globalization makes of falling trade barriers, it allows the companies to move their manufacturing sites or service to the developing countries with lower producing cost such as China, India and so on, these developing countries can provides low material cost or much lower wage rates for the companies rather than their home countries such as US, it can profits the company considerably, company can also outsource their service to another countries in which can provides them a lower business cost as well, so, because the production process movement to the developing country, the workers in the developed countries may lost their jobs , it may results in increase of unemployment and reduce living standard, for instance, Dell, IBM has outsourced service activities to the low cost suppliers in which in developing country with low wage, it actually contributes higher employment and low living standard to their home country, United States. Another problem from Globalization is the poverty gap; the level of technical standards is the main cause of gap distance between rich and poor, firm may also choose to move out its enterprise from the country that with low technical level, so the worker may lose their job, it may also result in a large number of the unemployment.
Hurts of domestic producer
Moreover, Globalization allows import goods from other countries; the domestic firms may face an intense competition by the foreign firms, because the foreign company may selling in a lower price or better quality than those products selling from the domestic firms, when those domestic firm face an intense competition and competitive pressure, the local employer may lay off employee or use wage reduction to cut cost in order to face the competition pressure, the local employer with lower income and increase unemployment, they may reduce local consumption, it may results in lower living standard and potentially affect the local economies. For instance, In Hong Kong, there are many foreign brands keeping entry in the garment markets such as Uniqlo, H&M and Zara, they provides better quality, more stylish and reasonable price, the Hong Kong brands Bossini has been facing the big attack and competitive pressure from them.
National Economy easily be affected by the external factors
Besides, globalization lets national economies closely linked with the world economy, the stability of the national economy is not only depends on the domestic factors, it can be greater impact by the international factors as well. Because the continuous expansion of international trade and the trade of services, the economic conditions of the other countries such as the inflation, financial crisis, especially of the major trading partners, it will deliver the international economic impact to the home country. Refers to the developing countries, because the economic globalization is including of finance, trade and investment, however, due to the insufficient development of markets in the developing countries and the economic structure is relatively fragile, so it will be much easily have impacts from the external factors. As for the Economic globalization, the changes in interest rates, exchange rates and the economic cycle of the developed countries will also be transfer to the developing countries, so, the economies of developing countries are often occur with unfavorably fluctuations. For example, at the end of 1994, the Mexican financial crisis and the Southeast Asian financial crisis in 1997 has been fully explained of this argument point.
Reasons for globalization:
Globalization activates the country economies, because it allows free flow of worldwide capital, technology, products, markets, resources, labor and investment.
No matter how high of the economy efficiency a country is running, it will always subject to the restrictions of resources and markets, global resources and market integration can helps them to avoid of these restriction, Economic globalization can achieve the most favorable conditions for the production and selling in the most ideal market in order to achieve the greater condition of world economic development, it improves the economic efficiency and people can satisfy their needs.
Increased employment of developing countries
Moreover, Globalization helps generate of employment, because of the emergence of new firms and markets, there are a lot of skilled and unskilled labor that is required; moreover, the immigration is increases between countries, it potentially provides people of better opportunities to work all round the world, because the developed countries may attract by the lower wages or raw materials, they may prefer to make investment in the developing country such as build manufacture site or exporting service, it gradually narrow the gap with developed countries and promote their local economy ,helps in rise the living standard of the people and reduces poverty. for example: All of the footwear of Nike is produced outside of the United States, in 2009, it has contract suppliers in China, Vietnam, Indonesia and Thailand manufactured 36%, 36%, 22% and 6% of total NIKE brand footwear, respectively.
Moreover, globalization provides people to have more choices when buying things, people can allows to buy lower prices and higher quality goods, which means people can save more money to buy another things, it facilitates the local economies.
Besides, globalization reduces trade barriers, it allows developing country to export their good to another countries, it can avoid the problem of products overproduce, also, it can sell its products to the outside countries, it helps developing country to improve their local economy.
Which side is more convincing?
In my opinion, I m standing on the side of support globalization, I know about that globalization could bring us some negative influences, but I think the benefits is outweigh than cost, refers to the problems of jobs or incomes, actually, globalization allows free trade that lets countries can specialize to produce of the good and service they can do it most effectively when the importing goods or service could not perform as efficiently, refers to the argument of against globalization, we know that the workers in the developed countries may lost their jobs such as lost call centre job in Dell, but when we see clearly, the whole economy is better off in a result. For example, the textiles products of United States at home when they can produce in the lower cost in China or Honduras, import the textiles from China lets US leads for a lower price for apparel, it allows consumers to spend their money to buy things on another ways, moreover, the developing country such as China can also gain benefit of increase income level because the increased income has generated from the textile exports, it also lets China to buy more good which is produced from United States. Same with Dell, dell outsource service India, it can reduce of their cost structure, which means the price of PCs is fall, the United States consumer can gain benefit because they can spend money to another good or service, at the same time, India increase of its income level which allows Indian to purchase more US goods and service, this can potentially helps create jobs in United States as well, at this point, it seems globalization brings benefits both developed and developing countries.
In fact, globalization brings us many useful advantages. No matter developed or developing, under globalization of market, we can buy things from different countries easier, we have more choices when we making purchase, also, the price will be lower and higher quality product, we can saving our money to buy another things and increase consumption , it actually increase of our living standard and economy growth.
Although, we know that globalization has increase of competition, but in my opinion, competition can let company to keep development of their product or service in order to ability complete in the market, they have to keeping increase of their product quality in order to fight for the foreign firms, same as the foreign firms what they have to do, it benefits to the customer can gains more better things. Besides, many policies are using to avoid intense completion from the foreign to protect local firm such as tariff, quota and government requirement, so, it has some way for the nations to protect its country under globalization. In conclude, that is no doubt globalization can brings some problems , but in fact, the benefits is still more than lost from it, also, in this generation , globalization is gradually mutual and cannot be change, On the contrary, if there is no globalization, the humans living and world economic do not have advancement for sure.
Actually, globalization has divided to three phases, it includes 1.0, 2.0 and 3.0, the three phases are with different actors, and these main actors are country, multinational company and Individual.
The main player in this level is the country. Refers to the theory of globalization 1.0 from Thomas Friedman’s, in 1492 Columbus has found the Americas and in the 1800 it ends while the Industrial Revolution has began in England. In the Globalization 1.0, the countries and governments were trying to advance and conquers more land in order to prove had the most money of themselves. After Columbus found the Americans, the "race" was started to off, many other countries wish to get a piece of it while finding the new lands, refers to the theory from Thomas Friedman, it states that they are come to gather and is doing something on an global scale, it includes all of the European countries imperialized and colonize all of the territories, it brings the world more closer, actually, it is "Shrink the world from Large to Medium".
The main player in this level is the multinational company such as McDonald. It is the next theory of Globalization by Thomas Friedman; Globalization 2.0 was started in1800s and ended until the 20th Century.
The different between 1.0 to 2.0 is companies rather than nations, it has became multinational, Thomas Friedman has said made that the world continued to "shrink" till it was from "medium to small".
Companies started to use the labors from another nations such as either outsourcing or recruit of immigrants during the Industrial Revolution in America, some of the big firm or major companies such as Railroad companies would like to use attractive things to attract the immigrants to come and work for lower wages from Europe and Asia, as what Thomas Friedman was talking about that the move of many foreign communities was came from different countries in such of better life and work but roped into work for major firms in building the diversity of racial.
Also, Globalization 2.0 means how much money they could accumulate in companies and ability to find the cheapest labor costs, moreover, how technology started to advance further, because the better communications with other countries and innovations of technology has reduced the cost of transportation, communication, and production.
The main player in this level is the Individual .Globalization 3.0 becomes the newest phase in the theory of Globalization by Thomas Friedman, Globalization 3.0 has begun in 2000 and currently it is still presenting. Refers to Globalization 3.0, it means the individuals interaction of the world rather than one country. In 2000, in the sense of Globalization 3.0 had change the world from a small size to a tiny size, people could get a job across the globe in every time and everywhere. Globalization 3.0 has gathered everything that was invented in Globalization 2.0; it involves the fiber-optics, PCs, bandwidths, and the capabilities of all the software connected them in which possibly lets people can communicate across any distances. Globalization 3.0 as individuals, it is the most modern age, actually its set up could against each other but also lets each other to achieve the goals. This age is people or small groups rather than nations or companies and to do it for glory of their inventions and discoveries.
The winners and losers under Globalization:
Under the “One World”, some of the role is getting benefits, another role is losing things, and I will have a discussion about who is winners and loser in the following parts:
Developed countries (Winner) versus Developing countries (Loser)
In my opinion, one of the winners under globalization is developing country such as United State; one of the losers is developed countries such as Africa.
Developed countries making investment in the developing countries such as Africa, the World Bank makes loans for the developing countries, apparently, it can helps these countries to accelerate more modernization and make their life to improve. Moreover, the economic development lets every parts of the production to get the most cost-effective place ,it makes the world's resources to use more efficiently, the developed countries can enjoy the prices continued to decline, while the developing countries can improve its domestic economic and employment situation. But when we think deeply, it is wrong, there are no both winners for both kinds of country, actually developed countries are winner, developing countries are the loser. Refers to the operation pattern of Multinational, in fact, it is a typically capital accumulation, actually, it is exploited to another country’s proletariat to instead of the local Proletariat. Under the trend of globalization, although the total production value is keep rising, but the biggest beneficiaries is still the bourgeoisie of the developed countries, in fact, the distance between the richer and the poorer has not been weakened.
In addition, the developed countries actually is implementing free trade, in fact , they are using export subsidies on certain types of products due to the various domestic political considerations, also, they use the anti-dumping as an excuse to increase import tariffs to get benefits, besides, the multinational production activities of developed countries in third world countries tend to use the lower protection law of local labor and environmental protection in order to save a lot of expenses, although , the lower labor safety and environmental damage sometimes do not have any immediately impact , but the problems may be occur in the future such as workers suffering from silicosis or ecological destruction, actually ,all of this are the heavy social costs for these developing countries.
Big company/ multinational firm (Winner)
Another big winner is the big company, under globalization; it gains two valuable advantages from globalization of productions and markets. Refers to globalization of productions, the division of production is not only at the national level, the big firm can direct investment to the another countries under the lower trade barriers, this big firm can use different kinds of investment to produce the optimal part in the most optimal country such as benefit from lower wages, skilled labor or raw materials, actually, it can reduce producing cost and increase of productivity, for instance, Such as the Boeing 747, the 4 million parts are distributed from the 1500 large enterprises and more than 15,000 small businesses through out of 65 countries to participate in collaborative production. Refers to the globalization of markets, The big brand can also selling its products throughout the world easily in order to penetrate more different markets in different countries, it helps increase profits and establish a strong and popular brand name, it applies to almost everything from general merchandise to the high-tech products, from tangible goods to intangible services, for instance, you can eat McDonald and KFC's fast-food everywhere, drink Coca-Cola beverages in every place, buy Hitachi TV in and driving Mercedes-Benz car every countries.
America’s Middle Class (Loser)
Globalization lets United States has a lot of cheap goods import into the country, also, globalization lets the United States export of many middle-class jobs to another developing countries such as China and India. This trend is not the intention by the developing countries; in fact, it is advocated by the big firm and tycoons, the biggest losers in the globalization are the American middle class.
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