in ,

What Are the Pros and Cons of Globalization?

 

What Are the Pros and Cons of Globalization?

Globalization connects nations around the globe with each other through trade and technology, which ultimately creates an interdependent world. Advancements in communication and technology have allowed people to connect on a global scale. There are different aspects of globalization that concentrate on specific topics such as culture, technology, economics, and socialization. As a whole, globalization has numerous positive effects but also comes with negative ones as well which leads to the question of what are the pros and cons of globalization?

Pros of Globalization

  • Global market expansion
  • Exchange of goods and ideas
  • Innovation
  • Promotes prosperity and peace
  • Efficiency

Cons of Globalization

  • Creates inequalities
  • Loss of employment
  • Negative environmental impacts
  • Exploitation of labor
  • Economic vulnerability

The History of Globalization

The History of Globalization

Globalization is often attached to the discovery of the New World in 1492, but some historians have argued that globalization dates all the way back to when the Silk Road was established.

The Silk Road was an ancient trading route that allowed the Western world of Europe to exchange goods with the Middle East and China. Paper is one of the famous goods invented in China that made its way all the way to Europe via the Silk Road.

Pros of Globalization

Globalization improves the quality of life by helping developing countries’ economies grow and get stronger. With people around the globe becoming more interconnected, it gives humans the ability to communicate and produce goods more efficiently, share ideas and cultures, and lowers the cost of production and consumer goods.

Global Market Expansion

More opportunities become available as the global market expands. Businesses and corporations gain an advantage by having access to more markets than what would be possible if the world wasn’t so strongly connected on a large global scale. Domestic production and trade do help workers within a nation, but if products are manufactured domestically prices will be much higher and the likelihood of inflation increases.

Access to overseas markets increases the number of consumers a business has access to. For example, local businesses make revenue from residents or visitors within the local area. Although local businesses can pull in a generous amount of revenue, the business won’t have the ability to grow nearly as much if it does not expand. Businesses that expand to a national level increase their revenue by making their products or services accessible to a larger pool of consumers. International businesses allow consumers from all over the world to access their goods or services.

Not only can global market expansion open up job opportunities for businesses looking to develop new relationships, but it also helps fuel the economy. This can be especially helpful to less-developed countries that can grow exponentially because they are able to export goods that are easy to produce and import goods that aren’t easily accessible.

Exchange of Goods and Ideas

Globalization promotes interconnectivity, therefore goods and ideas can be exchanged throughout the world. The first and second Industrial Revolution helped improve communication immensely through technological innovations. The invention of the telegraph was the foundation of long-distance communication and eventually led to more efficient communications such as the telephone, the computer, and internet that allowed people to exchange information easier and faster.

Globalization Increases Innovation

The global economy is fueled by competition amongst industries. If an industry becomes more competitive, it increases innovations because businesses and corporations seek ways to make products and services better than their competitors.

Improvements in goods and services have a long-lasting impact on the quality of life. For example, the invention of the printing press expanded the literary world and improved the way humans were able to access and share information through publications and newspapers.

Promotion of Prosperity and Peace

Promotion of Prosperity and Peace

Trade is a very important factor tied to a number of pros in globalization. Nations that form interdependent relationships through trade often avoid conflict in order to keep a healthy economic relationship amongst one another. Strong alliances between countries help advance members’ collective interests and lead to success.

Increased Efficiency

Globalization helps nations become more efficient by opening up access to new profitable markets. Nations can focus on specializing in certain industries, therefore production becomes more efficient.

Many countries rely on imports from foreign countries for access to products that are of limited availability domestically. If a country tried to produce products that used resources that were limited in the area, it would slow down production and raise the cost of the goods, making the entire process less efficient.

Cons of Globalization

Globalization can offer the world many advantages, but there are some negative effects that accrue from becoming more interdependent. Nations’ economies have the potential of becoming more vulnerable to foreign trade and investment and the environment has been negatively impacted by globalization for decades since the Industrial Revolution.

Globalization Increases Inequalities

Although globalization can open up new job opportunities, technological innovations and large industry competitors have made it difficult for workers to remain in manufacturing jobs. Industries are more often seeking high-skilled labor now than ever before, pushing low-skilled laborers out of the industry. High-skilled workers will see better-paying positions at the expense of less skilled workers. This creates a bigger gap between higher-paid workers and low to middle-wage workers.

Labor-saving technologies such as artificial intelligence and automated machines have helped reduce the amount of manual labor needed for production, which pushes many workers out of production industries. Globalization plays a hand in economic inequalities, but it is not the sole contributor as there are other factors that vary by country that contribute to inequalities.

Exploitation of Labor

When countries become more interconnected through various forms of trade, some nations suffer from the exploitation of labor. Workers in developing countries are often paid very low wages to decrease the cost of production. A company can take advantage of lower-waged workers and increase company profits on products with low production costs and higher sale prices.

Imported goods are also competition for domestic workers. If more goods are being imported at a cheaper cost than being domestically produced, this can cause workers’ earnings to decline significantly. However, it largely depends on the industry or business as some workers benefit from international trade with the potential to raise workers’ wages.

Economic Vulnerability

Globalization creates a very fragile economic system that can lead to the rise and fall of a nation’s economy. Currency crises have the potential to cause substantial negative impacts to the economy. If currency is devalued, a nation or region can suffer. For example, in the early 2000s Turkey was amongst the top 20 largest economies and became increasingly involved in foreign investment. The value of the Turkish lira fell in 2018, leaving Turkey in a currency crisis as they accrued debt largely in part to raised interest rates by the US Federal Reserve.

Overall, globalization has a positive effect on the global economy but uneven distribution of benefits can easily break a nation’s economy, especially one that is not considered developed. Capital flow reversals caused by unexpected changes can negatively affect a nation’s financial systems and create instabilities within the economy.

Negative Environmental Impacts

Negative Environmental Impacts

The environment suffers from globalization due to emissions created from the transportation of goods, exploitation of natural resources, and contributes to the threat of habitat loss. Transportation of goods over long distances significantly increases the amount of emissions entering the Earth’s atmosphere which accelerates climate change and global warming.

Transportation of goods, such as oil, can be very risky for environmental health. In 1989, the U.S. experienced one of the worst oil spills in history when an Exxon oil tanker, Exxon Valdez, spilled millions of gallons of crude oil into the Prince William Sound in the Gulf of Alaska. This man-made environmental disaster caused major repercussions to the waters in the area, with pockets of oil still found in certain spots. The oil spill killed hundreds of thousands of birds and sea animals.

Timber extraction caused by the increasing demand for timber leads to the loss of biodiversity and increased deforestation. A mature tree has the ability to absorb up to 48 pounds of carbon dioxide per year. As carbon dioxide is being released into the environment at a rapid pace from cars and factory emissions, trees naturally clean the air by absorbing the carbon dioxide. When deforestation occurs it threatens wildlife habitats and has detrimental effects on climate change and global warming.

Overview: Pros and Cons of Globalization

Globalization has helped mankind become more interconnected than ever before. The global market has expanded exponentially allowing consumers to purchase goods and services at lower costs and production efficiency has increased due to industry specialization.

Interconnectivity also promotes peace and prosperity for nations as agreements are made and conflict is often avoided in order to maintain those agreements. Ideas and goods are exchanged at a much higher and faster rate which can lead to new innovations that can improve quality of life.

Despite the many pros of globalization, the cons can be detrimental to the economy. Workers suffer from low wages and can be pushed out of jobs due to the increased demand for highly-skilled laborers. Economies become much more vulnerable with globalization as sudden changes within an economy can have harmful effects. Globalization also increases environmental damage that has long-lasting effects.

Overall, globalization is important for humans to be more connected and increase advancements, but globalization does create problems that make it both beneficial and disadvantageous.

Related Articles

The Pros and Cons of the Industrial Revolution Explored

What Are Some Famous Police Misconduct Cases?

What Are Some Famous Police Misconduct Cases?