Debate: “Is globalization good or bad?” and Final Exam Review

1. Debate: “Is globalization good or bad?”and Final Exam Review Lesson 29

2. Debate: Is globalization good or bad? • Source of issues is the Globalisation Guide.org website at http://www.globalisationguide.org/ (an Australian organization)

3. Why is there global inequality,and is it getting worse? • “The gap between the rich and poor nations of the world is increasing…By the late 1990s the fifth of the world’s people living in the highest-income countries had: • 86% of world GDP—the bottom fifth just 1%. • 82% of world export markets—the bottom fifth just 1%. • 68% of foreign direct investment—the bottom fifth just 1%. • 74% of world telephone lines, today’s basic means of communication—the bottom fifth just 1.5%.”

4. Why is there global inequality,and is it getting worse? • “There is mounting evidence that inequalities in global income and poverty are decreasing and that globalization has contributed to this turnaround. For example, the World Bank notes that China's opening to world trade has brought it growth in income from $1460 a head in 1980 to $4120 by 1999. In 1980, American's earned 12.5 times as much as the Chinese, per capita. By 1999, they were only earning 7.4 times as much. The gap between rich and poor is also shrinking with most nations in Asia and Latin America. The countries that are getting poorer are those that are not open to world trade, notably many nations in Africa.”

5. What are the costs and the benefits of free trade? • “International trade and investment have been the engines of world growth over the past 50 years… The benefits of that growth have been shared. The countries that are getting poorer are those that are not open to world trade, notably many nations in Africa… Many people believe that exports create jobs, and imports cost jobs and that it therefore makes sense to have barriers against imports. This thinking led to the Great Depression in 1930, because so many countries had erected barriers against imports that global trade fell with catastrophic consequences.”

6. What are the costs and the benefits of free trade? • “The World Trade Organization agreements on free trade have functioned principally to pry open markets for the benefit of transnational corporations at the expense of national economies; workers, farmers and other people; and the environment. The WTO should not solely focus on opening markets but also allow trade to be restricted to support human rights, labor rights and environmental objectives in other countries. The WTO and trade agreements should also allow non-government organizations a direct voice in their governance. The freeing of financial markets has brought global instability, as evidenced in financial crises in Asia and Latin America and the continuing marginalization of sub-Saharan Africa.”

7. What is the role of the internetand communications technology in globalization? • “Many within developing countries see the internet as an opportunity to gain access to knowledge and services from around the world in a way that would have been unimaginable previously… Globalization has drastically improved access of technological latecomers to advanced technologies and, to the extent that technological upgrading is important for development, it provides a unique opportunity for low-income countries to raise per capita income.”

8. What is the role of the internetand communications technology in globalization? • “Although the internet started off as a communal medium for sharing information, principally among academics, it is increasingly becoming the tool of transnational corporations to market their information products around the world. Because it is rich countries generating most of the content on the internet, it becomes a form of cultural imperialism, in which western values dominate. English is the language of the internet.”

9. Is globalization shifting power from nation states to undemocratic organizations? • “There are two strands to the argument that globalization is undermining nation states. First, it is that it is empowering corporations at the expense of the nation state, and secondly, that the international institutions such as the WTO and World Bank are not democratic…. There is an issue of sheer size. It is noted that many corporations are larger than nation states – more than half the 100 largest economies in the world are corporations. The sales of Ford and General Motors combined are greater than the combined GDP of sub-Saharan Africa while those of the six largest Japanese trading companies are almost as big as all the nations of Latin America combined…. None of these supranational organizations are democratically constituted, and they make their decisions behind closed doors.”

10. Is globalization shifting power from nation states to undemocratic organizations? • “The major multilateral institutions acknowledge the need to improve the transparency of their decision making and each has programs to make themselves more open to outside contributions and develop better information flows. However they are all organizations composed of governments. In the case of the World Trade Organization, the practice has been that no decisions are made unless a consensus of governments is achieved. This guarantees that the WTO reflects the will of its member nation states.”

11. How does globalization affect culture? Is it ‘Americanization’? • “It is argued that one of the consequences of globalization will be the end of cultural diversity, and the triumph of a uni-polar culture serving the needs of transnational corporations. Hence the world drinks Coca-Cola, watches American movies and eats American junk food. American culture is seen to be dominated by monetary relationships and commercial values replacing traditional social relationships and family values.”

12. How does globalization affect culture? Is it ‘Americanization’? • “It does not make sense to talk of a world of 6 billion people becoming a monoculture. The spread of globalization will undoubtedly bring changes to the countries it reaches, but change is an essential part of life. It does not mean the abolition of traditional values. Indeed, new global media, such as the internet, have proven a powerful means of projecting traditional culture (and the culture of radical opponents of globalization).”

13. What are the environmental impacts of globalization? • “Integration in the world economy contributes to environmental improvements by promoting growth, increasing incomes, improving property rights and the allowing the efficient use of resources. The major cause of environmental damage is market failure. Market failure is when those who are producing or consuming goods or services do not have to bear the full costs of their actions, such as the cost of pollution. The remedy is to make the polluter pay.”

14. What are the environmental impacts of globalizations? • “One of the drivers of globalization is that transnational companies want to place environmentally degrading industries in countries that do not have adequate environmental controls.Resource industries such as forestry, mining and fisheries exploit the resources of poor countries with little regard to either the long term cost to the country in terms of the loss of a national resource, or to the environment.”

15. Is globalization resulting in industries in developed countries being undermined by industries in developing countries with inferior labor standards? • “Globalization results in the exploitation of millions of workers in countries that do not give workers rights to organize. For example, a woman who sows a $200 Liz Claiborne jacket sown in El Salvador is paid just 74 cents – less than half of one per cent. In the US, the labor cost to sew a garment is typically 10 per cent of the retail price.Workers in poor countries may have to work 12 hours a day, seven days a week with few protections for health and safety. In some countries, globalization leads the exploitation of child, and prison labor.”

16. Is globalization resulting in industries in developed countries being undermined by industries in developing countries with inferior labor standards? • “The growth in trade between nations has contributed to lifting 3 billion people out of poverty over the past 50 years. Reducing tariff barriers, which makes it easier for nations to trade with each other, lifts the wealth of all nations by allowing them to concentrate on those where they have greatest expertise.”

17. So………. • Is globalization good or bad?