Merriam Webster defines word globalization as the act or process of globalizing. First known use of word globalization is from year 1930. (Merriam-Webster, n.d.) Globalization itself came popular in the 1960s and the protesting against it has always been present when talking about globalizing world.
The globalization has always been a hot topic since it affects life of large number of people all around the world. Very often the non-ethical side of globalization is reviewed. Anti-globalization connects large number of groups for example including even anarchists, unionists, hard left parties and environmentalists. Typically, people who are openly interested in the living conditions of developing countries are against globalizing world and the way money flows in it.
There is also the other corner, who doesn’t find globalization or free trade evil. They are the ones who believe globalization might be the answer to fight against poverty and help developing countries actually develop. The only problem in this scenario is there is no pure free trade. The trade is always somehow monitored and regulated. (Jeffer, 2002)
The democratic malaise
The democratic malaise: globalization and the threat to the west is an article about globalization in industrialized world where electorates demand their governments and what the governments can deliver. Citizens find their governments responsible for deteriorating in living standards and growing inequality that globalization creates on its way.
Few of the rising democracies like Brazil, India and Turkey benefit from the economical imbalance that arises from all this. China is not to be forgotten. They do not only ignore nearly all the trading rules and World Trade Organization laws, they also manipulate their currency in a way it’s efficient buy from them but Chinese themselves can’t afford to buy nearly any foreign goods. This creates a massive imbalance to the flow of goods.
Outsourcing, global trade and fiscal imbalances, excess capital and credit are few of the consequences of globalization. It is easier to buy an specialist from China, or help desk worker from India than from traditional western countries. The quality of service due to language barrier may vary at times, but it is worth the risk considering the cost. This also leads to the point where middle-class wages have been stagnant for a few decades now. This makes the situation for some unbearable. The wage stagnation and outsourcing, fear of losing one’s job are symptoms of globalizing world where global capacity for manpower has never been higher and demand doesn’t meet the supply anymore.
Many of the traditional policy tools to govern economic performance has become inefficient. The fiscal and monetary policies have little effect on the economy. The rising income inequality in United States of America has caused dissatisfaction. The American dream is only a dream nowadays, jobs are taken overseas and losing all their houses and retirement savings doesn’t help with this.
The Europe is not in any better shape. In most major European economies inequality has risen also. Spain faces unemployment of 20 percent which is intolerably high. In the same time Europe has excellent welfare system in most of its countries which becomes very unsustainable system in the long run of unemployment and global competition.
Immigration is one solution on the largely aging European age structure. The problem in this scenario is unwillingness of integration and lack of progress integrating immigrants as part of the society. (Kupchan, 2012)
Globalization and poverty
A very typical argument against globalization seems to be concerning poverty and inequality. There’s only few topics that reach that kind of focus of discussion. Globalization can be interpreted many ways where some find globalization only to mean outsourcing by domestic companies in wealthy countries and some see globalization solely as global reach of information and communications technology. Globalization in contrast of economic globalization is about expansion of foreign trade and investment.
The principle of free trade is to produce and export goods one produces most effortlessly, the rest can be imported. This goes for countries as well. The specialization is a business where benefits are more and more visible in the long run. In specialization anti-globalists typically see the problem where rich can get even richer while poor are getting more and more poorer, because many poor people lack the possibilities to adjust in constantly changing business environments changes.
The factual evidence doesn’t support the theory of growing inequality gap. Extreme poverty where people live below one dollar a day budget has decreased. For example, in China people living below one dollar a day have decreased from 79% to 27% in just 20 years (from 1981 to 2001) and in the same period people living with less than one dollar a day in Indonesia have decreased from 55 to 11.
Sometimes globalization is accused of exploiting the poor economies like in Asia, where a significant number of women work in clothing factories. The multinational corporations pay their workers less than is humane and in the same time the clothes themselves cost numerous times more than an average salary of one factory worker. The working conditions are poor, and they should be better but in the contrast of all this: People working in the streets have even less. They carry bricks on building sites and earn less than women in factories. The dollar or two per day means the women can feed their children and provide them better lives.
The global benefit doesn’t come without responsibility. There should be some capital controls especially in the speculative short-term capital for example shares, bonds and currency. The wrong statement and the worst possible timing may cause enormous damage to fragile economies. Asian financial crisis from year 1997 is an example of this: Thai currency bhat lost its value 50% in one year. In the same time in the Indonesia real wages in manufacturing dropped 44%. Capital controls are needed to prevent this from happening again. (Bardhan, 2006)
Conclusions
How globalization affect our everyday lives? Most definitely globalization has affected many developing countries. For example, China has flourished in the past decade. They produce overly cheap products, even the term “Chinese copy” is widely known among consumers. They want the luxury items but do not want to pay for them so instead they buy cheap Chinese copies of luxury items. Some of them are so well made that it is very hard to tell whether the products are genuine or not. It takes very experienced eye to tell the difference between Burberry bags stitches and their fake copies.
Free trade is often meant together with globalization and not without reason. The world is growing smaller every day and as mentioned above, the goods purchased from Asia are not so unusual these days. There is a downside to all this. Cheap Chinese copies are not regulated as well as well-known brand’s products might be. The chemical load in these items can be overwhelmingly large. Some of these products cause severe allergic reactions and in the long run they also can cause adverse effects like infertility.
The good example for the harmful chemicals is organic synthetic compound Bisphenol A (BPA) which was typically used in nearly every plastic product in the 1990 and before. It is known for its estrogen-mimicking properties where it acts just like a hormone. It can cause infertility and erectile issues. Most of the manufacturers these days promise to produce BPA-free plastic products to prevent these symptoms to appear.
The globalization and money itself aren’t evil. The globalized competition has driven the prices to drop, at least for some countries. China doesn’t play with other countries’ rules and they have gained unfair competitive advantage by devaluing their currency. This makes their goods a lot cheaper to buy and drives exporting business when companies all around world are buying cheap labour from China. Chinese cannot enjoy their cheap currency since it’s way too expensive for them to buy anything abroad.
Over all the globalization have given us a lot to think about. The consuming should become more moderate, but for majority it is very hard not to spend on cheap goods that are easily available just by few clicks on their phone, tablet or computer. The globalization has made the world smaller and especially for many young people the globalization means easier traveling and nearly every corner of the earth is in their fingertips. In less than a day they can fly to the other side of the world and see the foreign wonders.
I find globalization in its many forms a very good chance for the whole world to become as one. And it’s not just some hippie talk but thinking about the good sides of globalization everybody should be pro-globalization in the end of the day. Yes, globalization may take the factories and jobs abroad because of outsourcing. But this shouldn’t be a bad thing. The world is evolving and so should we along with it.
As a full-time ICT cloud engineer I find my job very interesting because it is changing constantly. The nature of tech industry is constantly evolving and every week something new pops up. It is wonderful and keeps the industry vivacious. People don’t consume paper any more as much as they used to so why should we keep all the paper industry workers employed just to save their feelings? Everybody must adapt. And what better tool there is to that than globalization?
References
Bardhan, P. (2006, March 26). Scientific American. Retrieved from Does Globalization Help or Hurt the World’s Poor?: https://www.scientificamerican.com/article/does-globalization-help-o-2006-04/
Ferguson, N. (n.d.). CIRSD – Center for international relations and sustainable development. Retrieved from Populism as a Backlash against Globalization – Historical Perspectives: https://www.cirsd.org/en/horizons/horizons-autumn-2016–issue-no-8/populism-as-a-backlash-against-globalization
Jeffer, S. (2002). What is globalisation? The Guardian.
Kupchan, C. A. (2012). The Democratic Malaise: Globalization and the Threat to the West. New York: Foreign Affairs. Retrieved from https://search-proquest-com.ezproxy.hamk.fi/docview/912658307?pq-origsite=primo
Merriam-Webster. (n.d.). Retrieved from Globalization: https://www.merriam-webster.com/dictionary/globalization
