I thought it was important for me to discuss the globalization pros and cons with you because there is so much propaganda working against it. I often hear hyperbolic words to describe it like "exploitation" and rich countries using poor countries, but that's not really what it means. Globalization is the concept of opening up the markets of countries and allowing the world to participate. There are even people that think this is how a country loses wealth because it leaves the country.
I hope that anyone with a brain recognizes that in a market, you don't have the wealth of a nation looted by merely opening up the borders. There isn't a person on this planet that takes their hard earned money and allows someone else to take it. That's not how the market works. Everything is a mutual exchange of goods and services. If you buy a television, from an American retailer that had a Chinese person make, isn't a loss for society or for you. Though some would tell you that an American worker should have made the television.
I hope when I present the globalization pros and cons, you'll at least look at things from an objective point of view, instead of looking at things as exploitation or things of that nature.
PRO: Increased Competition
One of the biggest complaints that I hear about capitalism is the fact that big evil monopolies immerge. I've never seen any big evil monopolies that have occurred in a true free market economy, nor if there was one, why it is a bad thing. But I think everyone appreciates increased competition because it means more innovation and cheaper prices in the market place. With a nice open world market, which you get with globalization, there is no way that you can run into monopolies and things of similar nature.
Something I feel is far more important is that competition leads to the restructuring of a labor force. This is where you happen to find the most resistance to globalization because people fear change. If it is cheaper and better to manufacture in China then Americans will experience losses in manufacturing jobs. This has been happening for some time and we'll continue to see it in the future.
Is that a bad thing? I don't think so, but I know many people that hold these jobs will tell you. But think about this. Agriculture used to be the big labor market in the past. Most people worked in the fields doing horrible work, just to produce enough food for us to all eat. Someone invented the tractor and put a lot of people out of work. Could you imagine how the world would look today if the government forced the ban of the tractor to save jobs? We'd probably still be working on farms.
But instead, these people left their jobs and moved to the cities. The labor force adapted and moved into more manufacturing like markets. Today, we're facing the same type of change. The labor force is moving into the information market and some are calling this the next market revolution. There is no doubt that the Western world is producing the most brilliant minds on the planet. It's a waste of labor to have people here working on a manufacturing line when they could do something a hell of a lot better. This is one of the big globalization pros.
PRO: Everyone Gets Richer
The problem with the anti-Globalization movement is that they assume everything is zero-sum. If I go and buy groceries, I'm somehow poorer. That is not how it works. If I'm willing to pay $500 for a television, I'm not poorer. The business selling the television isn't poorer either. I'm more than willing to give up $500 for a television and the business is more than willing to give up a television for $500. I get something that provides the entertainment I want and the business turns a profit. We're both richer for the transaction.
When I can go into the market in Cambodia and do more profitable business then I'm better off to do that. A farmer in Cambodia can sell food to me and it's not exploitation even if I pay a cheap price. If they normally sold things for a $1/pound, there's no way that I can buy from him at $0.25/pound. If I'm picking up a huge volume, he would go out to get more land and a modern tractor. This helps this farmer produce more food and less cost, which increases their profit margins.
We're all richer when we are able to freely trade in all markets around the world. Globalization pros and cons are usually derived from this particular fact, but if you can get past the hyperbolic terms like exploited you should see we have people that want to do business.
A little evidence to prove my point… Asian countries have been the most open countries to globalization. The continent of Africa is the least open to globalization on the planet (aside from South Africa). If you go back half a century you'd know that Africa was actually a better place to live when compared to Asian countries. But with globalization Asian countries are pushing into the first world. China and South Korea are practically first world countries now. We have Malaysia, which is modern and also Singapore. Countries like Vietnam and Thailand are on their way to being first world too.
Africa has been stuck in a rut. Corrupt politicians that are more interested in tribal living and anti-West dogma. Their markets are closed for business and that is why the people in those countries have the lowest standards of living on the planet. And just consider the fact that Africa is the most resource rich continent on the planet and it's also dirt poor.
There are many more globalization pros and cons. This particular post has got a little too long right now, so I'm going to continue it in the future with more information for you to digest and put into your system.