If we were to go out on the roads in any major city and ask people to explain what globalization is and the way it affects people in a Jay Leno type manner we would probably arrive with many different answers. Why is this? Why are their so many different definitions of globalization and why are there so many different views on the topic? In this essay we will look at the definition of globalization including the advantages and disadvantages of this conception. To First tackle these questions let’s take a look at the definition of globalization.
There are many types of globalization. These give us the capacity to describe it in many different fashions. We could look at cultural globalization for example. This explains and discusses the flow of a culture and cultural values around the world and manner in which they build upon one another and meld together, or we could take a look at communication and how it changes across the globe. Though, for the sake of this section, we’re going to focus on Economic globalization described by Bhagwati in his book In Defense of globalization. According to Bhagwati, Economic globalization constitutes integration of national economies into direct foreign investment (by corporations, the international economy through trade, and multinationals), short-term capital flows, international flows of migrant workers and humanity generally, and flows of technology Now that we got a brief understanding of what economic globalization is, let’s look at some controversies revolving around globalization and identify positive areas of globalization and other areas that need fixing.
Globalization: The Good, The Bad and The Ugly
Let us take a look at an issue that is constantly seen in the media, this would represent the issue of outsourcing. When Nike first started outsourcing jobs overseas people were outraged. They were giving away American job just to make a few extra bucks and people were simply not happy about it. So how is this form of globalization even possibly a good thing? An argument that would support this part of globalization would be that by shipping jobs overseas countries in our economy are able to better maximize profits and thus help to grow our economy. Well this sounds all well and good but how long’s it going to be until we see a number of these gains in our economy? Are we not taking advantage of people overseas by paying them next to nothing? If one of us went to work one day and have discovered that our job was lost to outsourcing we can be assured that we would not be contented with someone told us that it was going to benefit the economy as and whole and finally increase the standard of living. No. We would be miserable because we were now out of a job and amongst the unemployed; a person does not live off of future gains. Now when deciding whether or not we’re taking advantage of those less fortunate overseas by paying them so little we need to look at real wages.
If globalization causes an increase in real wage overseas and an eventual growth in the economy through the sacrifice of American jobs, how is it that we are able to stop the disappearance of these jobs and still maintain the benefits from globalization? This clearly needs some sort of fixing. One way that we were able to help with the disappearance of jobs would be tantamount to compensate those that lost their jobs from a clear from of outsourcing until they’re able to get back on their feet. This is already done through programs provided by the U.S. government while it is often hard to make a clear distinction when it comes to the way in which a job is lost.
Yes, because we live in an increasingly smaller and globalized economy. Outsourcing, contrary to popular belief, actually generates more jobs in the family country rather than ‘take jobs away’. The real debate should be how best this can be used to your company’s advantage. Increased globalization, superior technology and cloud computing is what drives the world today. Clients need to make the best use of this or they may find their business simply getting left behind.
Along with benefits form globalization there are likewise other areas that need fixing. A problem that we are able to see clearly results from globalization is the problem of illegal immigration from poor countries to rich countries. It has become simpler and more beneficial for people living in a bad country to go to a country with a stronger economy through globalization. This is especially true when considering the movement of people from Mexico to the United States. So why do not we just open up our boarders and make it legal? If we were to simply open up the boarders between the U.S. and Mexico our economy would be obliterated. There would be a huge rush from into the U.S. by people waiting along the boarders. This immense rush of people would suck our economy dry, leaving us in a far worse condition. We are therefore presented with the problem of what has to be done with preventing illegal immigration. It used to be that the majority of our illegal immigration from Mexico came for people crossing the Rio Grande though it now is from a different form. Bhagwati says that 50% of the illegal immigrants now come form legal means such as visas. They enter the country legal and stay illegally. We know that it is not possible to eliminate illegal immigration so what are we gonna do about it? He explains that to solve this problem governments in the developed countries must turn to policies that will integrate migrants into their new homes in a manner that will minimize the social costs and maximize the economic benefit. This is a problem that won’t only result between Mexico and the U.S. but also other countries as well.
Now we’re going to take another look at an area of globalization that needs improvement. This problem is the ease at which capital flows can move in and outside of an economy. It has been increasingly easier and more easily invest in foreign economies due fallen barriers broken down by pressure from agencies such as the IMF and OECD. The most adverse effects have arisen from the liberalisation of the financial and capital markets-which has posed risk to developing counties without commensurate rewards according to Stiglitz. As globalization continues to occur it has become easier to invest in foreign economies through decreased barriers and instant transfers via the Internet. This can could potentially cause overwhelming problems because as investor sentiment changes, the money is pulled out, leaving in its wake economic devastation. So how do we fix this problem that arises form globalization? There clearly needs to be some type of barrier when it comes to capital flows. [Capital-market liberalization ] illustrates what can go wrong with globalization. Even economists like Jagdish Bhagwati, strong advocates of free trade, see the folly in liberalizing capital markets. It is clear that we require to have some type of resistance to the ease at which capital may flow in and outside of a country.
Lowering of trade barriers that enables the free movement of goods, services and capital from one country to another.
In this article we have examined the definition of globalization, areas of globalization that are sound as well as areas that could use some improvement. From this we’re better able to fully understand the complexity of the issue and hopefully gain some insight that will allow us to live in a manner that will help better our world.