Globalization

What is globalization and why do so many people fear the impact of it on the economy and society? 

The term Globalization basically refers to international trade. It is when companies and businesses of a certain nation go global and open their economies to increase the trade with other nations. This trade can be of various goods, capitals, and services, but it does not include the free trade of labor as it may harm the economies of smaller nations. Through globalization, we are moving towards a more integrated and interconnected world.

Along with all the benefits, there are certain negative aspects of globalization as well. Economists seem to neglect this point that the world does not have infinite resources, so international trade is providing us with only a temporary solution. Countries become interdependent. Thus, if one of them collapses, the others crumple too.

International trade is using up all the finite resources of the world so quickly that we will be left empty-handed very soon. Rapid consumption of these resources is making the world a much-polluted place. People of developing countries fear globalization because international trade always happens in the expanse of the economies of smaller nations. It is mostly to provide richer and powerful countries with cheap raw materials and labor. The local economies of smaller nations might drown out as it does not guarantee them any benefits. TNC, the trade negotiations committee, is capable of shutting down a factory and operating it somewhere else if it costs less there. It also threatens the culture and traditions of the world. People fear that due to globalization, One day capitalist North and West will overpower all the cultural heritage of the world (Das).

There might be an increase in textile jobs in developing countries. Thus, the industries might start to flourish there, but this will happen at the cost of jobs in the manufacturing department of the United Kingdom or other already developed countries.

How has globalization impacted the micro economy in terms of jobs, households, companies and cost of production? Provide real world examples. 

The globalization has a huge impact on the macro-economy. International trade increases the jobs in the export department at the expense of destroying them in the import sector. But is it able to balance the number of jobs destroyed with jobs created? The answer is mostly no. The trade deficits have increased rapidly over the past few decades. The trade deficit is defined as the difference between a country’s imports and its exports. As the trade deficits rise, countries need to borrow money to balance their surplus number of consumptions over their productions. Later, this debt must be paid back with interest (Ostry and Spiegel).

International trade is responsible for transferring jobs from developing countries to the ones that are being developed. Thus, the United States face a rise in trade deficits every year.  The United States borrowing increased to $2 billion every day as it was reported in 2007.

Industrialization overlaps with globalization in so many aspects. The effects of globalization are a mix of individuals. Those living in developed cities enjoy a lot of benefits, but the villagers face disastrous effects. Bangalore, the IT capital of India, faces short supply of water as the people have started moving to the cities from rural areas. The industrialization takes up 60% of the water supply of the village destroying their agriculture sector.

The vast development in technology has made jobs more accessible to people with better degrees and more knowledge. Thus, it has increased competition. Specialization has increased the need for individuals with specialized skills. Every day new technologies are being developed that require technical skills and organizations. Hence, it has discouraged the concept of family and class backgrounds. Labor is divided now by merit which encourages individualism (Ostry and Spiegel).

Can and should globalization be stopped from a legal perspective? Make an argument for or against globalization by using a real-world example of how globalization helped or harmed an economic or social system. 

Globalization has largely contributed to the international, global and national inequalities. The international economic law has not only been unable to stop it, but also has contributed to its increase through its institutions and policies. It has been reported by the Organization of Economic Cooperation and Development that by the year 2060, due to globalization, inequality in an average country will reach to the level of the most unequal countries of the world. The gains by India and China might have decreased the international inequality, but the national and global inequalities are still at peak (Goda and Torres García). Developed countries face inequality as the wages are being decreased and the jobs are being shifted at the bottom. Vast development in technology also has an impact on equality. Automated systems have replaced human labor. Thus, it only provides benefits to the owners of the capitals. Thus, a paradigm is severely required to address this inequality (Oyekanmi).

Globalization undoubtedly promotes opportunity and reduces poverty. But the problem is, it does so in an unequal manner. The powerful countries get all the advantages. The definition of “fairness” and “opportunity” are different for the rich nations, for example, the United States, and the developing countries. This distinction needs to be eliminated. The International economic law (IEL) needs to take a look at its institutions first. They need to be just about everyone. The international economic rules need to be reformed in the areas of investment and trade, IMF, global finance, tax law, borrowing and resource privileges and the policies that favor the immunity of multinational corporations.

Globalization might have taken thousands of people out of poverty, but it has made the rich countries richer and the developing countries, poorer. In Thailand, the income of a rich person is ten times of a poor person. The situation is even worse in Mexico. These numbers need to be rebalanced. And the growth model needs to be fixed.

Work Cited

Das, Dilip K. “Another perspective on globalization.” Journal of International Trade Law & Policy 9.1 (2010): 46-63.

Goda, Thomas and Alejandro Torres García. “The Rising Tide of Absolute Global Income Inequality During 1850-2010: Is It Driven by Inequality Within or Between Countries?” Social Indicators Research 130.3 (2017): 1051-1072.

Ostry, Aleck S and Jerry M Spiegel. “Labor markets and employment insecurity: Impacts of globalization on service and healthcare-sector workforces.” International Journal of occupational and environmental health 10.4 (2004): 368-374.

Oyekanmi, A O. “Globalization; Its Implications and Consequences for Developing Countries.” African Journal of International Affairs & Development 14.1/2 (2009): 69-90.