Globalization, in general, has received a lot of harsh criticism which are usually pointed to the negatives. In most cases, these criticisms emanate from the group that stands against the free market economy. Most of the criticisms contend that globalization does not reduce poverty, but rather maintains it. Particularly the distribution of new technology and investment in the foreign currency by developing nations might have boosted inequality levels. Only a fairly small number of nations are relishing the benefits tailored by globalization while most of the negative effects are perceived by third world nations (Macleod). This primarily relates to companies and organizations that have shifted their operations to cheaper nations, a situation whose aftermath is negative impacts on employment in already developed nations. As such, the question is, do the benefits outweigh the cons?
The factors that have been identified as the drives of globalization in the recent past include; Technology, Trade, and Investment. Technology plays a crucial role in the entire process of globalization. Most people contend that technology is the utmost and the most compelling propeller of globalization, which helps in the easier movement of goods and services, as well as ideas across nations. The development and improvement of transportation infrastructure, for instance, has made it easier to move huge amounts of people and commodities in a short period of time. Automation on the other hand has boosted production as well as the distribution of goods and services (Sullivan). In the same manner, telecommunication gave people the chance to interact and communicate especially through social media platforms
The impact of trade is often built on its ability to boost and reinforce relationships between different nations. In the contemporary world, it has become almost impossible to be autonomous. The global marketplace was fashioned through the elimination of barriers and the reduction of limitations in foreign investments. However, it was the global investment that spearheaded globalization by incrementing integration. A lot more countries have enjoyed the benefits of foreign direct investments, loans, and foreign portfolio investments. These have formulated new and fresh companies, as well as new sources of revenue
The existing level of competition in the current world market is an obvious result of globalization. Competition in a global context leads to the production of high-quality goods and services. In other words, when there is a chance of choosing from substitutes and alternatives, the consumer demand grows, and companies have to reiterate by creating the best products just to stay in the market. Generally, companies that still need to stay relevant and up to date achieve this by increasing the quality of their goods and services.
Market efficiency on the other hand has been achieved through an equilibrium of buyers and sellers where there are willing buyers and willing sellers at the same time. In this case, no party seeks to exploit the other (Eriksen & Hylland). In other words, both parties exist in a free market where they are driven by will. If companies can boost their production by outsourcing or by making purchases of discounted products, they can then replicate this to their market prices where they can offer goods at low and affordable prices. Nonetheless, if companies do no spread the price reduction to their customers, they can still reciprocate the subsidization by increasing their employees’ wages and salaries or even invest in expansion
Since the world, today has become a “global village” nations hugely depend on each other. As such, it is very rare for them to jeopardize their relationships. This clearly implies that; they ensure stable and boosted security as far as operations are concerned. More on this is that human rights have been improved as a result of the diversity of interacting/trading nations.
While economists refute the effect of globalization on variation, it’s impossible to find instances of developing nations that were in a position to grow over a long period of time without subscribing to trade. In some sense, globalization alone cannot be held accountable for the deprived conditions of third-world nations. Their situation has more to do with poor governance, weak economic policies, and futile reforms.
In the same manner, there is no justification that trade can increment poverty levels or reduce growth rates. On the contrary, when nations subscribe to trade, their growth tends to escalate and the living standards as well increase. The benefits and advantages of growth in developed nations also narrow down to the developing nations. Nonetheless, it’s not often simple to underpin the manner in which developing nations have profited. This is simply because globalization clenches such a huge effect on different levels, adjusting, for instance, technology and the macroeconomic situation (Yusuf et al.). There is also no justifiable data or information concerning the general welfare of people in these nations.
When assessing the social effects of globalization, one must put into consideration a number of factors including environmental harm, instability in the job market, and fluctuation of prices. Globalization sires escalated production which implies a rise in the utilization of natural resources. More trading activities also imply the existence of increased transportation which translates to a rise in the use of fossil fuels. The aforementioned when brought together boosts pollution rates and accelerates a change in climate which has turned into a serious threat to humanity.
The escalated competition within the market has resulted in price fluctuations. Developed nations have been compelled to lower their prices in order to maintain their competitive point against exploiting countries such as China that can produce similar goods for half the market price.
Due to globalization, the Job market is insecure and more positions have been rendered temporary. This has highly impacted developed nations where firms can outsource help for some of their processes and positions including customer support. The aftermath of outsourcing is the reduction of jobs for people in the first world. Globalization has also suffused culture where there have been claims that it has broken a considerable number of cultural boundaries. In other words, the increased rising interaction of western culture and local cultures has led to the dismissal and at the same time the assimilation of cultures from either side. As such, cultural lines and boundaries have been greatly breached and are still in the course of being broken. More people have been fascinated by the cultures and lifestyles of the people they are interacting or doing business with. And due to the desire of human beings to fit in a given society, more people have relinquished their cultures in search of a new and “descent” way of living.