Globalization Pros and Cons: Where Both Sides Sit

Globalization Pros and Cons: Where Both Sides Sit

Globalization, In Brief

Globalization pros and cons remain a flashpoint in the US and abroad. Throughout the latest global economic crises and heated presidential elections, debates swelled. Republicans’ “America First” stance clashed with Democrats’ global citizenship perspective — with ripple effects felt around the world.

Before exploring these viewpoints in more depth, let’s refresh the basics. Globalization is the increasing economic, cultural, and political interdependence of people around the world. Nations typically globalize their economies by supporting the free trade of products, jobs and information across their borders.

Despite more interest today, globalization began thousands of years ago. “People have been trading goods for almost as long as they’ve been around,” the World Economic Forum notes. Although, trade didn’t become a global endeavor until the first century BC. That’s when China established the first international trade route — the Silk Road — to exchange silk for Rome’s wool.

As civilizations experienced scientific and industrial revolutions, they established new trade routes across land, sea, sky, and digital networks. At the same time, globalization increased in waves. Today, global leaders are seeking to adapt to the fifth wave, which is somewhat confusingly referred to as Globalization 4.0.

Now, let’s discuss globalization pros and cons before diving into the political division.

Globalization Pros

Economists widely agree that globalization fuels economic growth for nations and businesses. Participating in global trade unlocks new resources, more jobs, more workers, and new revenue streams. Globalization also allows countries to specialize in producing some goods locally and import others, increasing efficiency and lowering prices. 

Many also credit globalization with helping to lift the majority of the world’s population out of extreme poverty. Studies show that gross domestic product and average incomes have increased worldwide alongside globalization. At the same time, the percentage of people living in extreme poverty has decreased globally. China’s rapid transformation into a global economic superpower also shows globalization’s ability to produce wealth and reduce poverty quickly.

Another major boon: Globalization encourages international cooperation. As populations depend more on one another, global alliances have formed to improve the lives and protect the rights of people worldwide. Today, nations work together to combat climate change, stop political conflicts, protect human rights, regulate trade, and more. 

Lastly, globalization has helped improve people’s health worldwide. Trading vaccines and other healthcare resources across borders has helped humans get rid of some diseases and more than double the average global life expectancy.

Globalization Cons

With increased economic interdependence, one domestic crisis can cause a global meltdown. For example, the 2008 Great Recession in the US bankrupted American banks, businesses, and consumers. It also triggered a deep global downturn.

Secondly, globalization may worsen economic differences. Studies suggest that globalization produces large gains for executives and minimal benefits for less-educated workers. Low-level workers are also more vulnerable to job losses due to companies sending jobs to countries with cheaper labor pools.

Another con: Globalization can spur rapid development in emerging economies — at the cost of human rights and the environment. Corporations based in developed countries have a harder time ensuring workers are paid and treated fairly when products are developed around the world. Similarly, globalization opponents warn that increased economic output globally increases pollution and harms wildlife, with little oversight.

Lastly, political tension resulting from increased interdependence can reduce international cooperation. In recent years, the US fought a trade war with China and prioritized expanding the US-Mexico wall. Britain exited the European Union. Trade negotiations between Latin America and the EU stalled. Concerned with rising tensions, the World Economic Forum warned that the next financial crisis could spur a global military conflict.

Globalization Pros and Cons: Where Both Sides Sit

In 2015, Pew Research reported that 58 percent of Democrats and 53 percent of Republicans said free trade agreements were good for the US. However, a divide grew amid the 2016 presidential election. Republican candidate Donald Trump blamed globalization and poor trade policies for wiping out American manufacturing jobs and the middle class. By March 2016, 40 percent of Republicans and 60 percent of Democrats considered trade agreements good for the country.

Regardless, debates over globalization pros and cons are nothing new. International trade has divided Republicans and Democrats since the early 19th century. Back then, Northern manufacturers — backed by Republicans — sought high taxes on imports competing with their products. Cotton producers in the South — backed by Democrats — supported unrestricted free trade to keep their exports competitive.

Today, the Republican party wavers between its more recent history as the “free trade party” and supporting Trump’s leadership. Democrats generally embrace free trade and oppose tariffs, while seeking better protections for workers’ rights and the environment. So far, the Democratic Biden administration has taken initial steps to enforce existing trade agreements and invest in American manufacturing. Although, tariffs imposed by the Trump administration remain intact.