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What are the pros and cons of Globalization? What is Globalization? Why does it matter? How can it affect your life? If you wonder about the advantages and disadvantages of globalization, this article will make things clear.
We often hear the term Globalization. It is a word that comes up every time we talk about the modern economy, politics, or society. Globalization means the integration of companies or nations into a larger co-operating unit.
This increased connection has turned the world into a global village. Just like everything, globalization has some pros and cons depending on the political views of who you are asking. In this post we attempt to give a fair and balanced view of globalization. We will be pointing out both the pros and cons of globalization, because this is not a subject that is 100% good or bad, there are aspects of both. Let’s get to it…
So What Are Pros And Cons Of Globalization?
These days it is very easy to communicate trade, travel or start ventures with other countries. All thanks to globalization! At the same time, we are facing environmental and human rights issues…
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As global citizens, we should be well informed about how globalization affects our lives.
In this post we are presenting the 24 advantages and disadvantages of Globalization. These would help you to understand the dynamics of the modern world. So here we go!
12 Potential Benefits Of Globalization
1. Expansion of free trade
Globalization has increased free trade. Free trade encourages trading without barriers such as tariffs. It increases exports and provides greater choices for consumer goods. It reduces the expenditure of government by creating opportunities for foreign investment.
Free trade will allow people to buy anything from anywhere in the world if hurdles of tariffs, sales taxes and, other subsidies are removed. This way, business owners will find their safe haven in free trade. One cannot deny that free trade is a huge advantage for any economy and society. It allows lower prices for goods, and more diverse goods to purchase. These factors allow solid economic stimulus for all parties involved.
2. Increase in job opportunities
Globalization has increased competition. It drives labor toward more productive jobs. According to an estimate of the World Bank Group, 600 million jobs would be increased by the year 2027 by globilization.
Globalization has created endless job opportunities for people around the world. Apply anywhere according to your education and skills and bingo global work.
It also increases the variety of job opportunities to choose from, because you can now work remotely from your employers and clients. But hidden in these job opportunities are also one of the disadvantages of globalization, that will will get to soon.
3. It can control the exploitation of currency
Global powers manipulate their money to increase their worth and demand. Currencies like euro, dollar, and pound are classic examples in this regard. The enhanced global contact can eliminate the need for this manipulation to gain an advantage of price so that the consumer can benefit from the outcome.
Globalization does not allow countries to control the currencies of other local economies. In this way, it is the customer who can take advantage of the outcome. It is, yet one of the most significant advantages of globalization.
4. It can provide opportunities for developing countries
Many countries, especially third world nations have agrarian economies. They are at the entry-level of industrialization. It offers these regions with better opportunities to prosper by providing them international access.
The only scenario where the globalization is not termed bad by the critics is in the development of third world countries. Open borders promote trade. It brings out endless business opportunities. In today’s time, it is bringing a considerable lot of aspiring entrepreneurs on board. With the chance to expand its global outreach, globalization is playing an important role in developing third world nations and putting money in the pockets of people who invest in these nations.
5. Globalization broadens the communication between varied people.
Modern modes of communication allow access to more culture, information, and knowledge. There is more influx of international information. It provides necessary exposure for growth.
The most evident and prominent advantage of globalization is open communication for all. The internet is one obvious example of this. YouTube and easy access to many countries news-feeds is another.
But perhaps the biggest example of globalization increasing communication is social media. Facebook. Instagram. Pinterest. Twitter. These social media platforms may not always be positive, but they certainly do give us an unprecedented ability to meet, mix, mingle and communicate to various people from many different nations and ideologies. This free communication allows the intermingling of cultures.
6. World power is Emerging
Instead of divided centers of power, world power is emerging. It is beneficial to people all over the world. The global policy making and decisions impact the power hubs. It necessitates them to abide by standards of global welfare such as human rights.
7. It increased openness to diversity
Nowadays, people are more open to variety than ever. It reduces a sense of alienation towards foreign culture because everything is globalized. People are becoming more open to learn and appreciate differences.
Globalization brings international corporations and governments together. This urges them to fulfill their responsibilities towards social and ecological problems of the global society. Only a stable community will embrace and welcome what all the business giants and innovative startups have to offer.
This allows businesses to draw effective and eco-friendly strategies in their planning and development due to their corporate social responsibility. Today, this advantage is gaining more light in the analysis of the pros and cons of globalization.
8. It has made the world more convenient
Technological and scientific advancements have made the world a better place. There is an improvement in the quality of lifestyle and healthcare. Improvement of lifestyle has increased the life expectancy of human beings.
Now people can travel faster, communicate with each other, and benefit from life-saving medications. Rarities are no rarer. Various modes of trade have made it more accessible.
9. Pooling of resources
Pooling resources can combine multiple talents to work towards a single goal. Instead of numerous agencies doing the same thing, a single agency can do it all !. It can also enhance innovation in the industry.
Globalization has made every social media platform into a smaller model of media networks. One can post the video online, and it becomes a Global Property. Today there are YouTube channels and an interesting bunch of individuals who call themselves “bloggers.” These people are giving a tough time for traditional media and the entertainment industry. It is globalization that has expanded its global and digital footprint alike.
10. It supports democracy
Globalization makes colonial designs hard to thrive. It gives rise to collective consciousness hence favoring democracy. It provides more power for people.
11. Reduction of prices
The global competition among various countries and markets with bring down the costs of goods. It is favorable for consumers due to economy of scale.
12. It provides stability to world politics
Despite the wave of populism and elitism, globalization encourages more cooperation than isolation. Isolated economies cannot grow well. Hence, a certain level of economic relationship is to be maintained through alliances to preserve resources.
So these were the most prominent advantages of globalization. As they say there a thousand angles to every picture, similarly, so has Globalization. It also brings along a bulk of cons with itself. The following are the most common disadvantages gathered by the most prominent critics of this phenomenon.
12 Potential Cons of Globalization
1. It allows capitalization of wealth
Free trade is more accessible for conglomerates as compared to small business and local buyers. It enables the accumulation of wealth. It leads to the monopolization of resources in the hands of few.
Critics say that the real picture of globalization is an entirely different one. It is supposed to be about free trade. Whereas, in most of countries, there is 20 percent of Value Added Tax(VAT) which stops the consumers from buying imported products. It makes the rich grow richer and thrusts the poor down the poverty line.
Free trade also creates an imbalance of wealth in society.
2. The exploitation of low- cost job market
Global connectivity creates more jobs but the areas with low-cost labor get exploited. The same amount of work is outsourced at dirt cheap rates. It hinders the financial growth of workers.
The most prominent disadvantage of globalization is that it allows free transfer of companies. This makes them transfer themselves to lower-cost regions. It saves them a lot of money as the cost of labor is very cheap. It may allow a bunch of job opportunities and the expansion of the company, but it drags the poor to the bottom line in real. That’s why it is the reason why critics call it as the most prominent disadvantage of globalization. This factor also gives rise to child labor.
3. It creates a disparity of resources
Wealthy countries will consume more resources as compared to poorer countries. It will create a global wealth gap.
According to the United Nations Development Program, 86% of world resources are consumed by G-20 countries, whereas 80% of the world consumes only 14% of the wealth.
Easy access to almost everything has created an enormous surge in cybercrimes, harassment, and terrorism. Globalization’s biggest disadvantage till date is the increased activities of extremism which people “express” over the internet. It is eventually promoting a culture of fear and hate.
4. The spread of diseases is more rapid
Health conditions become more communicable due to increased contact and traveling.
It is believed that a new virus can spread in less than 14 days all over the world, given the current situation of open global accesses.
It can expose diseases from remotest parts of the planet to healthy parts of the earth with deadly potential.
Diseases in today’s world are most viral and pose deadly health threats to the world as due to globalization. Open borders provide the smooth movement of people, and this allows the diseases to communicate freely.
5. It can jeopardize safety net in the social welfare system
Social welfare exists in many countries. It provides several facilities to financially oppressed people, including food stamps, provisions, healthcare, and housing.
A country can afford that for its citizens through taxation. If expanded to the world, it would be difficult to provide a safety net to people that face poverty.
6. It can be dangerous for the environment
The pollution level can be increased due to an increase in industries and production. It can acidify the air and make the situation of global warming worst. Despite the various pros and cons of globalization, this one remains the biggest global threat.
7. Cultural identity would be lost
It inculcates a global culture that is popularized through pop culture. The globalization of homogeneous culture leaves little room for indigenous cultures to nourish healthily.
It can lead to a collective identity crisis due to losing large swaths of cults into this homogeneity.
“Opening up borders poise a threat to national identity,” says most of the critics. Larger countries experience this kind of trouble like America. For instance, a person may be from Iowa, but he will call himself an American first.
If it is applied on a planetary scale, this would mean large swaths of culture would lose their identity. This loss of culture would be a great loss for humanity. This very aspect is also a huge concern for critics when they debate the pros and cons of globalization.
8. It can increase global corruption
The monopolization of power can lead to corruption. If a single unit began to govern the entire world, it could lead to many negative consequences such as despotism. This is the biggest con of globalization.
In many developed nations today, there are large organizations, lobbyists, and affluent people who are associated with legislative issues. This allows them to have an arrangement of guidelines and laws which are in their favor. It paints a rather shallow picture of democracy which most of the superpowers portray. Again, it stands as one of the most significant disadvantages of globalization.
9. It can lead to political capitalism
Multi-national organizations take part in political activities and influence policy making. They can manipulate political institutions for their vested interests through their economic influence.
Political capitalism is a by-product of globalization. I which has increased their chances to capitalize on politics.
10. Increase in offshoring from advanced countries
The developed countries have higher costs of labor, manufacturing, and distribution. Companies relocate to areas where costs are lower. It causes a reduction in wages and benefits in developed countries.
It is not just the people, but the wealthy areas will also benefit from globalization. They get more abundant under the guise that they are producing more for the rest of the world. This scenario can be proved by the information from the United Nations Development Program. It states that the G20 nations consume 86% of the world’s resources. In comparison, most deficient 80% of the world consume the other 14%.
11. Globalization increases consumerism
It has worsened the situation of over-consumption. It gives rise to a disparity of resources and issues regarding waste management.
The wealthiest countries of the world consume 90% of all consumable items per day.
For example, a quarter of energy is used by the USA, while only 5% of the world population lives there.
12. It increased racism and hate crimes
The loss of identity creates mass hysteria in society. This is one of the most important among the Pros and Cons of Globalization. It leads to desperate attempts and racist behavior. In recent years, hate crimes are increased due to a heightened sense of racism.
A very important disadvantage of globalization is overpopulation. Every country has a specific capacity to pile up people and cater to their basic needs. Open borders have put a massive burden on the countries. Densely populated areas are lacking behind the race to obtain and maintain social order. Food, housing provisions, and other benefits are far from their reach as the government is unable to provide such a huge number of people.
What is the Future of Globalization?
The objective of globalization is consumer empowerment and strengthening of the worlds’ system. Globalization aims to make a robust civil society. It will allow the free flow of ideas and innovation. More integration will lead to the high social and economic mobility of future generations.
National policies will become more globalized.
Keeping in view the pros and cons of globalization…
Ideally, the welfare state model would become global.
This question can make every economist go silent for a few seconds because no one is sure where this phenomenon is headed. Critics say that the future of globalization will bring along many challenges for leaders and communities.
Firstly, It will be fruitful for many sectors but will still leave many people and groups vulnerable. Secondly, experts say that they have no time to waste. They state that they should always welcome every opportunity and they should find out multiple solutions to every problem. Thirdly, they state that they should respect all cultures and support cross-cultural engagement.
It is believed that this approach would eliminate all the negative aspects of globalization in time.
FAQs on 24 Pros and Cons of Globalization:
What is globalization?
Globalization is a network of different countries that collaborate with each other that results in an expansion of cultural, economic, and political activities.
What are the types of globalization?
There are three types of globalization. Political globalization, Social globalization, and Economic globalization.
What is the importance of globalization?
Globalization creates an opportunity to move and communicate easily with each other all over the world, it exceeds the business opportunities internationally.
Why is globalization bad?
Globalization is bad in the sense that it creates competency in businesses, you have to take new risks and uncertainties brought about by the high degree of integration of domestic and local markets.
Since we have analyzed the pros and cons of Globalization:
- The good side of globalization is about efficiency and opportunity.
- It will set the world in the cycle of income and employment growth.
- The bad side of globalization is about risk and uncertainty.
- It will decline the money flow across local boundaries.
- It will impact negatively on the individual, cultural and environmental.
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