22 Globalization Pros and Cons
by Crystal Ayres
Our world is becoming a much smaller place. We can quickly communicate
with people who are on the other side of the planet. A person with a computer
and a good idea can create an e-commerce platform which reaches the entire
world. In many ways, we are closer to each other than ever before.
Yet despite this closeness, we are still divided in the broad brush of humanity.
There are 200+ countries on our planet with borders that are enforced in some
way. People cannot travel freely across borders without some form of
identification or consequence if caught not following laws and standards.
Globalization asks this question: what would happen if all those borders went
away? Here are the globalization pros and cons to think about when looking at
a borderless planet.
What Are the Pros of Globalization?
1. It encourages free trade.
Without borders in place, consumers can purchase items from anywhere in
the world at a reduced cost. There would be fewer barriers in place, like tariffs,
sales taxes, or subsidies because there wouldn’t be nations in place that
could add restrictions. From 2008-2015, the Washington Post reported that
the G20 nations placed more than 1,200 different restrictions on imports and
exports. That goes away with true globalization, which means free trade will
be encouraged.
2. More trade means the potential for more jobs.
When there are fewer barriers in place to purchase items, then consumers will
generally purchase more things. This creates the foundation that businesses
need to create more jobs. Globalization with free trade increases competition
as well, which means innovation must be part of the equation. Consumers
benefit from that innovation with lower pricing, which means more products
can be purchased, and that can stimulate further growth.
3. It eliminates currency manipulation.
Many countries today manipulate their currencies to benefit their local
economy. Even the three “primary” currencies of the world do this: the pound,
the euro, and the dollar. Donald Trump announced in 2017 that the dollar was
becoming “too strong,” which is a statement that was meant to potentially
weaken the dollar. With globalization, countries no longer have a need to
manipulate their currencies to obtain price advantages, so it is the consumer
who can benefit from the outcome.
4. Open borders mean more opportunities to develop poor areas of the
world.
There are many nations in the world today that are in a state of entry-level
industrialization. Poverty is a feature in many of these developing countries.
Through the process of globalization, the removal of borders allows the
people in these areas to experience greater prosperity because each area
gains the ability to access what they need. There are fewer opportunities to
suppress people at the expense of others so only a few can benefit from
success.
5. Business tax havens go away in globalization.
Numerous organizations over the years have been accused of placing their
money in countries that have generous tax laws. These countries, which are
often referred to as “tax havens,” allow the business to not pay as much in
taxes. It is a process which awards the executive team with high salaries and
bonuses, but leaves the common worker behind and limits the funds a
government receive for operational purposes. Through the process of
globalization, the tax havens go away because the borders go away.
6. It allows for open lines of communication.
When borders are removed, people have the ability to communicate with one
another more freely. There is a greater intermingling of cultures, which allows
people to have a greater perspective about the world. When we have access
to more information, we have an ability to make better decisions. Instead of
people from a different country being considered an alien, we would all be
considered human. It becomes a place that is more open and tolerant.
7. It could stop the issue of labor exploitation.
One of the ways that goods are produced cheaply in the world today is
because of labor exploitation. This can be seen with child labor, prisoner
labor, and human trafficking. Workers are further exploited through the
implementation of unsafe working conditions because they may have entered
a country illegally and face jail time or worse if they report on their conditions.
By opening borders, it becomes possible to open business activities, thereby
removing the need of a black market for cheap goods or services.
8. It limits the potential for abuse because there are fewer structures in
place.
In our current bordered structure, there are 200+ different administrations that
can potentially abuse their people. The levels of accountability that can be in
place to stop these abuses are usually implemented at the leisure of those
who are in charge. That is how dictators can come into power and then stay in
power. Globalization limits those structures and introduces a global system of
accountability, creating a safety net which could potentially stop violent
conflicts before they start.
9. We could begin pooling resources to do great things.
Multiple countries are running space programs right now. Some private
businesses are doing the same thing. If they could pool their resources and
combine talents to work toward one single goal instead of having multiple
agencies all trying to do the same thing, we could be more efficient with our
innovation in the area of space exploration. The same principle could be
applied to virtually any industry or idea.