Argumentation Paragraph

GLOBAL ECONOMY

Globalization is a term, often used as a name for a wide range of different processes and phenomenon in the cultural, social, economic and political life of civilization. That is the reason why it’s very difficult to explain the essence of this term for it very much relay on the context. For example, “Globalization is an overused word, which can have very different meanings, we will consider that this term means the globalization of financial markets and the growing dominant influence of the global financial markets and transnational companies on the national economics. In this sense we should distinguish globalization from the free market economy, which doesn’t have such great consequences for particular countries” (J. Soros). This definition concerns only economical side of the problem and in fact it says only that globalization is globalization.

Before giving the definition of this term, let’s name some of its components of the sense, which don’t depend on the context in which the term is used. First, globalization is a process. Second, this process concerns only the activity of human and the society. Third, as it is obvious from the word “global”, it is an all-embracing process. Forth, the specific aspect of this process is the growth of the number of contacts between people, the products, elements and consequences of their activity. So, Globalization can be defined as the ongoing global trend toward the free flow of goods and services and the creation of a world economy. Through global trade and cooperation, Globalization aim to benefit everyone who partakes in it. While it provides a great number of benefits to society, they are provided at the expense of others. Since it is argued for the greater good, it has become one of the most heated topics in international business

While it seems that globalization has many positive attributes, those who oppose it have a strong argument as well. Globalization makes the wide gap between the rich and the poor. While it does indeed create wealth, the people who reap that wealth are already wealthy. A United Nations Report by Joe Lauria states, “the richest 200 people in the world more than doubled their net worth in the four years to 1998 to $1 trillion, which is more than the gross national products respectively of Canada, Belgium, Spain, South Korea, Brazil or Russia.” When companies invest in foreign nations, the money that they earn is invested back into the firm’s home country. The only use of the foreign country is for cheap labor. In addition, despite of the increased economic prosperity that the firm creates, the foreign nation becomes dependent upon the company for employment, revenue, and technological improvements. Without the firm, the country can no longer be self-sufficient. However, globalization attracts firms to invest in lower developed countries where labor is cheaper. As they make these investments, a few benefits rise in that host country. First, the economy is lifted due to the sudden rise in the workforce. All the employees hired would be residents of that host country. Next, the government can collect taxes on everything produced and exported from the host country. For major apparel and car manufacturers, this figure can be rather substantial. Finally, the technological and managerial know how used to run the corporation is brought to the host country, providing knowledge and insight for many other domestic businesses.

Since companies seem to seek out the cheapest labor on the globe, foreign governments have decreased their human rights standards in order to attract investment. Some of these decreased standards include no child labor restrictions, no minimum wage laws, and unsanitary working environments. Furthermore, foreign governments also recede any environmental standards to make themselves more marketable towards large firms. As a result, companies do in fact have lower costs, yet, they result from the exploiting of both people and the environment. In addition to the effect that globalization has on foreign countries, the effect that it has on the home country is also substantial. When a firm decides to manufacture its products in a nation with cheaper labor costs, all of the people employed in the home country lose their jobs. This has a tremendous effect on the economy, especially when the firms employ tens of thousands of people. However a global economy brings lowered transportation costs and reduced tariffs. Under the theory of globalization, all barriers to trade will be lowered, allowing foreign products to compete directly with domestic products. Consumers benefit when the cost to import a product is lowered since foreign goods are in turn more affordable. The producers of these goods also benefit from the larger consumer market.

Since the first time that two countries traded with each other, globalization was born. Now, it is on an ever-growing path towards a free world market and a global economy. Despite the practical and inescapable benefits that globalization has brought, it has also provided a way for the rich to get richer, at the expense of the poor. It would be unreasonable to think that globalization could be stopped. Yet, it is obvious that the entire process needs to be reformed, globalization should try to benefit everyone more equally.

By: 

Azmi Ulil Aufa

1271231

English Department 2012-B