Advantages and Disadvantages of Globalization

Table of Content


I. Introduction

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            It is observed nowadays that every economic status of each country has been tried by times. It is phenomenal too that most of the nations nowadays are facing ups and downs regarding their economic status. It is also known to us how each country tries to overcome its economic dilemma. Even the most technologically advanced nations such as the United States of America and the European countries are not exempted for such crises and continuously looking for new strategies and approaches on how to cope with these phenomenal crises. Moreover, several industries around the globe are totally affected with this so called-economic failure and some of these industries are declaring bankruptcy and presently closed because they are not able to cope up with the low demands in the local market. The supply and demand in the market depends on the economy of each country. The first one to be affected with the economic stability or instability is the consumers, then the industries.

When there is economic stability, the flow of the supply and demand in the market is very high because consumers can afford to purchase products because of the affordable and reasonable prices stated but when there is economic instability and fluctuations, the industries will increase their product’s prices so that they can cope with their losses and accumulate profits. And because of these scenarios, the selling of the industries has been affected because their valued consumers are unable to manage the high-selling-prices and prefer not to purchase it anymore. And if the industries are starting to have difficulty in accumulating back their losses, there will be retrenchments amongst employees to pull back its profits.  Because of this depressing scenario, the economists had arrived into a conclusion, after with so many deliberations, that they definitely believed that this strategy will surely help the economic status of each country and this strategy is called “globalization”.

            The intents of this paper are to: (1) understand what globalization is; (2) know its historical precedents; (3) be aware of the globalization’s characteristics; (4) comprehend why there are anti-globalization and; (5) scrutinize the advantages and disadvantages of globalization on developing nations.

II. Background

A. What is globalization?

            Globalization defined as “an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations” (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).  This would mean that every nation needs the help of other nations. There is no such self-contained or self-sufficient nation. The consumer’s wants and needs in every part of the world are served better by trading services and commodities. Distinctions in production and distribution expenditures influence and persuade decisions as to which items a country imports, and which it obtains more profitable to produce at home. Moreover, the word globalization has been used since 1944 but economists have started using the term during 1981. The word ‘globalization’ is used to denote to a “historical process, the result of human innovation and technological progress” (see IBM Staff. “Globalization: Threat or Opportunity?”. January 2002). Globalization has distinct uses and these are:

a.1 Economically, socially, and ecologically negative

            It serves as an engine of “corporate imperialism”; one that steps on over the human rights of this progressing societies and declare to provide prosperity and yet frequently amounts to ‘plundering’ and ‘profiteering’. The negative outcomes may comprise ‘cultural assimilation’ through ‘cultural imperialism’, the devastation or ‘inhibition of authentic local and global community’, the trade of artificial wants, ecology and cultures (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).

a.2 Economically and socially positive

            It serves as an engine of commerce. Claiming to provide prosperity and an increased ‘standard of living’ which means to bring prosperity to progressing countries and ‘further wealth to First World and Third World countries’ (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006). Moreover, the standard description of globalization can be taken from International Monetary Fund which emphasizes the developing economic interdependence of every country world widely by increasing quantity and variation of cross-border deals in goods and services, “free international capital flows, and more rapid and widespread diffusion of technology” (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006). Furthermore, globalization can be categorized in separate aspects and these are:

Ø    Industrial globalization (also known as transnationalization) denotes to the growth and development of multinational enterprises (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).

Ø    Financial globalization pertains to the development of worldwide financial markets and has better entrée and approach to “external financing corporate, national and subnational borrowers” (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).

Ø    Informational globalization refers to the intensification of information flows between geographically isolated and inaccessible sites (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).

Ø    Political globalization implies the “spread of political sphere of interests to the regions and countries outside the neighborhood of political (state and non-state) actors” (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).

Ø    Cultural globalization signifies the development and expansion of cross-cultural exchange or deals (see “Globalization”. Wikipedia, the free encyclopedia. November 6, 2006).

III. Discussion

A. historical precedents

            Even though the word “globalization” was used in the later part of twentieth century  yet the word and its concepts was not known until the end part of the 1980s; several scientists have attempted to illustrate and explain stability between current trends of globalization and previous days. In addition, during 19th century, liberalization is frequently called as “The First Era of Globalization”. This was the period that was distinguished by rapid development in the area of international trade and investment amongst the European imperial power, their protectorates and subsequently, the United States of America. In the early part of the First World War, the “First Era of Globalization” started to collapse and subsequently breakdown in the gold standard crisis occurred in the last part of 1920s and first part of 1930s (see Bhaqwati, Jaqdish. “In Defense of Globalization”. ISBN: 0195170253). The countries that participate during the period of globalization, which comprise the European core, several of the European boundaries and some European American and Oceanic offshoots, really experienced rapid growth and development that made them to be prosperous countries. Furthermore, during Second World War, globalization has improved through the advances of technology that lessen the costs of trade and “trade negotiation rounds” which derived from the support of GATT that led to a series of treaties that eradicated restriction on free trade (see “Globalization: Historical precedents”.  Wikipedia, the free encyclopedia. November 6, 2006).

            Moreover, between the spring of 2001 and summer of 2002, Argentina experienced a financial and political dilemma compared to its neighboring countries like Paraguay, Brazil and Uruguay which have not undergone the same financial and political instability. The working people in Argentina were the first one to suffer the collapsed of its economy but those who were elite in the Argentinean society; they had the power to protect their wealth and assets while the working class in Argentina had no means for economic survival (see Lindsey, Russel. “Argentina’s Attitude towards Globalization).

B. Its’ characteristics

            Globalization (also called as internationalization) has become recognized of having a number of trends majority of which may have increased or accelerated since the Second World War. These consists of “greater international movement of commodities, money, information, and people and the development of technology, organizations, legal systems, and infrastructures” to permit this movement. The actuality of several of these developments is argued economically, culturally, and technical or legal (see “Globalization: Characteristics”. Wikipedia).


Ø    Growth in international trade and it has rapid rate compared to the growth in the world economy (see “Globalization: Characteristics”. Wikipedia).

Ø    Growth in international flow of capital which comprises foreign direct investment (see “Globalization: Characteristics”. Wikipedia).

Ø    Establishing of international treaties which lead to organizations like the WTO and economic associations like the OPEC (see “Globalization: Characteristics”. Wikipedia).

Ø    Growth and expansion of global financial systems (see “Globalization: Characteristics”. Wikipedia).

Ø    Upsurge the role of international organizations like WTO, IMF, and WIPO that trade with international business deals (see “Globalization: Characteristics”. Wikipedia).

Ø    Develop and expand economic practices such as outsourcing and offshoring through multinational corporations (see “Globalization: Characteristics”. Wikipedia).

* Culturally

Ø    Develops greater international cultural exchange (see “Globalization: Characteristics”. Wikipedia).

Ø    Spreads multiculturalism and have better individual entrée and approach to cultural diversity (see “Globalization: Characteristics”. Wikipedia).

Ø    Develops greater international travel and tourism (see “Globalization: Characteristics”. Wikipedia).

* Technical or Legal

Ø    Growth and development of global telecommunication infrastructure and better transborder data flow (see “Globalization: Characteristics”. Wikipedia).

Ø    Expansion in “the number of standards applied globally” (see “Globalization: Characteristics”. Wikipedia).

C. Anti-globalization

            The conception of globalization helps out the economy of its country to be stable and develop. However, there are groups of people who are against of it. When we say anti-globalization, it is a word that “ascribed to the political stance of people and groups who oppose certain aspects of globalization in its current form”. In other words, the anti-globalization group disagrees to some practices of globalization. Moreover, anti-globalization is regarded by several to be a social movement however others believe that it is an umbrella term which includes a few separate social movements (see  Holloway, John. 2002. Change the World without Taking Power: The Meaning of Revolution Today. Pluto Press. ISBN 0-7453-1863-0).

c.1 Ideology and causes within the movement

            In the later part of the twentieth century, the anti-globalization movement has been developed in order to oppose and resist the globalization of “corporate economic activity and the free trade” to the progressive countries. The anti-globalization movement’s members are normally nationalist, social democratic, anarchist or Eco-socialist options to liberal economics and ask for protection of the population of the world and ecosystem which they believe that these are the destructive effects of globalization (see Korten, David. 1995. When Corporations Rule the World. Earthscan Publications Ltd (Nov 1995). ISBN 1-85383-313-4).

            Moreover, globalization is not jest a present occurrence. Several analysts have debated that the global economy “was just as globalize 100 years ago as it is today”. But recently, commerce and financial services are totally improved and profoundly incorporated compared at that time. The 20th century observed and witnessed unparalleled economic growth having a global per capita GDP which intensify nearly about five-fold (see IMF Staff. “Unparalleled Growth, Increased Inequality: 20th Century Income Trends”. January 2002).  Below is graph of per-capita GDP from the year 1970 up to 2005 explains huge productivity growth in the United states of America’ economy (see “Economic history of the United States”. Wikipedia. November 3, 2006).

D. Advantages and Disadvantages of Globalization on developing nations.

d.1 Advantages

            There are several advantages in practicing globalization. Globalization will:

Ø    Developed free trade amongst nation and upsurge liquidity of capital which permits stockholders in well-developed countries to capitalize in progressing countries (“Advantages and Disadvantages”).

Ø    Corporations have better flexibility to operate across boundaries and global mass media brings together the world and upsurge flow of communications that permits significant and fundamental information to be shared amongst individuals and corporations globally (“Advantages and Disadvantages”).

Ø    “Greater ease and speed of transportation for goods and people” and decrease of cultural difficulties increases the global village effect (“Advantages and Disadvantages”).

Ø    Spreading of democratic principles to developed countries and better interdependence of nation-states (“Advantages and Disadvantages”).

Ø    “Reduction of likelihood   of war amongst developed countries and upsurges in environmental protection in well-developed countries (“Advantages and Disadvantages”).

d.2 Disadvantages

            However, there are more disadvantages in globalization than its advantages and these are:

Ø    Upsurge flow of non-proficient and proficient jobs for the developed to progressing countries as corporations search for the low-priced labor and upsurge likelihood of economic commotions in one country which affect ever country (“Advantages and Disadvantages”).

Ø    “Corporate influence of nation-states far exceeds that of civil society organizations and average individuals, and threat that control of world media by handful of corporations will limit cultural expression” (“Advantages and Disadvantages”).

Ø    Better chance of reactions for globalization being pugnacious in an effort to maintain and uphold cultural heritage and bigger risk of diseases being shipped inadvertently amongst nations (“Advantages and Disadvantages”).

Ø    Scattering of materialistic lifestyle and behavior which views expenditure as the path to affluence (“Advantages and Disadvantages”).

IV. Conclusion

            Globalization has been in the scene throughout the years; thus, globalization, outsourcing, industrialization, improved transportation, and multinational corporations have great impact. Global trading may serve as a tool to make one’s economy more stable or not. And because of our advanced and enhanced technology, we can easily do business internationally. The internet is one of the effective means of advertising globally; where we can have the chance to endorse our local products internationally and gain more profits if we have this access. But globalization always goes hand in hand with the local economy where products come from. Globalization may have positive or negative impacts to our local economy depends on the scenarios occurring. If we export our goods more frequently to other countries, surely our economy will boost up and increase. And because of this, job opportunities and hiring rates for jobs will also increase because of the in demand products exported; thus, it will lessen the poverty rates. But if the citizens of our country are fond of imported goods and products and choose to purchase them instead of ours, it will cause a great negative impact to our economy. It will make our economy unstable and there are companies that will struggle to survive. Excessive support in imported goods, products or services may “kill” our own economy.


“Globalization”. Wikipedia, the free encyclopedia. November 6, 2006.
IBM Staff. “Globalization: Threat or Opportunity?” January 2002.
“Globalization: Historical precedents”.  Wikipedia, the free encyclopedia. November 6, 2006.
“Globalization: Characteristics”. Wikipedia, the free encyclopedia. November 6, 2006.
IMF Staff. “Unparalleled Growth, Increased Inequality: 20th Century Income Trends”. January 2002.
Holloway, John. 2002. Change the World without Taking Power: The Meaning of Revolution Today. Pluto Press. ISBN 0-7453-1863-0
Kingsnorth, Paul. 2004. One No, Many Yeses: A Journey to the Heart of the Global Resistance Movement. Free Press. ISBN 0-7432-2027-7
Bhaqwati, Jaqdish. “In Defense of Globalization”. ISBN: 0195170253
Korten, David. 1995. When Corporations Rule the World. Earthscan Publications Ltd (Nov 1995). ISBN 1-85383-313-4
“Economic history of the United States”. Wikipedia, the free encyclopedia. November 3, 2006.
“Advantages and Disadvantages”.
Lindsey, Russel. “Argentina’s Attitude towards Globalization.


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