Points on Globalization. In defense of Globalization

In defense of globalization
Anti-globalization: Why?
• Economic Globalization constitutes integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals); sort term capital flows, international flows of workers and humanity generally, and flows of technology.
• Globalization is seen as the extension of capitalism throughout the world.
• Globalization is a broad term. It can go from the definition above to the popularization of drugs around the world, to the exchange of labor, to migration etc. It is therefore hard to give a reasonable opinion on what is beneficial and harming about globalization.
• Anti-globalization sentiments are more prevalent in the rich countries of the North, while pluralities of policy makers and the public in the poor countries of the South see globalization instead as a positive force. Poor countries in the South have seen their economies fail due to the lack of integration to the world economy, therefore supporting it nowadays when it is proving to be the better choice. Rich Northern countries have chosen the opposite way due to the effect caused by the said integration of other countries, for example affecting the labor unions and trade by more competition and presence of foreign labor.
• We’ve always had globalization, ever since the 19th Century with trade, capital flows and migrations! East India Company, Dutch East Indies Company, and Guipuzcoana.
• Anti-capitalism?
o Far too many among the young see capitalism as a system that cannot address meaningfully questions of social justice.
o Many of the anti-capitalist activists are not really economists, but students influenced by Marxist-like ideas.
o Dissonance between empathy for others elsewhere for their misery and the inadequate intellectual grasp of what can be done to ameliorate that distress.
• Anti-Americanism. The US is seen as the direct representation of globalization and its state of hyperpower and hegemony is despised by the rest of the world.




Globalization and its Social Effects:
• There are two types of activists: Stake wielding and stake asserting groups. The first focuses in driving a “stake” through the system as if to replace it for something else. The latter focuses on being part of the system and influence it for the better.
• Globalization can occasionally do harm. We need to create institutions and policies that either reduce the probability of such downsides or can be triggered so as to cope with them, preferably doing both. For example, Coastal shrimp farming in the Far East was damaging the surrounding mangroves because of discharge of chemicals and backup of uneaten feed, disrupting the lives of people in the surroundings. In response a polluting tax was imposed in order to reduce the problem.
• Policies to eradicate bad social conditions should be created at a faster pace to cope with the globalization positive results, while there are still there.
• Globalization at optimal speed, not maximal. Lack of management and neglect can let the economy spin out of control, however over regulation might slow down the globalization’s positive effects to set in.

NGO’s
Non Profit organization that is independent from the government.
NGO’s become global or transnational when they reach out beyond their domestic barriers, or expand.
NGO’s have personal interest first, so further global expansion increases their influence in matters like global economy for example.

• Globalization promotes trade. Trade speeds up growth. Growth eradicates poverty
• Using growth you must increase the incomes, therefore consumption and living standards of the poor. The main tools are expansionary government policies focusing on infrastructure, and foreign investment as job opportunities.
• High trade tariffs produce revenue, not necessarily protectionist consequences. That revenue is used to increase exports and produce growth. International trade promotes competition and inside growth because to participate in the global economy, inside macroeconomic reforms must be applied.
• Poverty does not equal inequality. In the last years globalization has decreased global inequality therefore globalization doesn’t lead to neither Poverty nor inequality.
• If globalization reduces poverty, people’s income increases and they can enroll their children in schools. This also decreases child labor.


Democracy at Bay
• Globalization creates a paradox in democracy. It promotes and restrains democracy in different cases.
o It promotes it directly and indirectly. Directly because now for example, farmers can dump their products into the market due to modern technology, thus giving them voice in the economic process and ultimately in the political areas promoting democratic processes. Indirectly through change in education systems resulting from growth, which eventually forms educated individuals that will reform the class structures.
o Economic prosperity will promote democracy over time. Russia vs. China, glasnost vs. democracy after great economic boom.
o If a single nation, even if the government is popularly elected, shifts to radical policies, financial capital may leave; even the bourgeoisie may emigrate.
o The democratic process may become illegitimate because corporations have captured it, that freer trade and direct investment lobbies are pushing for such integration for the world economy.
o Are the WTO and the NGO’s really democratic?
 The WTO has three facets:
• Oversees Trade negotiations.
• A small secretariat that services the director general and several committees of officials and examines issues before the negotiators.
• Dispute Settlement Mechanism that decides on complaints by its member nations
 Rich and Influential NGO’s tend to blur the transparent process of decision making in the WTO.
Workers and Labor standards at stake?
• Closer integration by the richer nations with the poor countries with a more abundant supply of unskilled labor, will depress the wages of the richer countries’ workers. However there is little evidence that this has happened, and it has been agreed that the role of trade with poor countries in depressing wages is small and almost negligible.
• The richer nations fear that trade and investment in the poorer countries will eventually lower down their own standards of working because of extreme competition (worker unions), however; little evidence of that actually happening has been found. In fact, the conditions of sweatshops in the U.S. are due to infringement of the legislated standards: first by lack of regulations since the 1980’s, and secondly due to lack of demand by the illegal immigrant workers, fearing deportation if they try to complain.


Corporations:
• Race to the bottom by countries on tax breaks and generosity in order to attract multinationals. Multinationals get the better deal and the countries end up being net losers. The more competition there is among nations, the economic gains from investment increase. In order to get better tax breaks and more permissive regulations, multinationals simply offer to go and invest the “scarce” resources somewhere else.
• Companies have also taken action in political affairs. In Chile during Allende’s dictatorship and The Congo. Pepsi and ITT fueled the coup in Chile while Union Meuniere (a Belgian Corporation) was implicated in the assassination of Patrice Lumumba, the first president of the Congo after achieving independence from Belgium in 1960.
• Do the Corporations really exploit their workers? Wages are based on the actual price of the product, not necessarily how much money the company has. For example a jacket that is 190$ can lose its value as soon as it touches ground in the place where it is about to be sold, and given that 1 out of ten jackets are actually sold, there is only a tenth of the price in revenue.
• LACK OF REGULATION is the answer
• Multinationals make better products and illustrate the methods to domestic companies.
What can we do?
• We need institutions and policies that trigger out when globalization and trade consequences turn towards the negative effects. Policies that make sense and try to favor expansionary rather than contractionary effects, unless they are needed.
• We need to increase the pace at which globalization and trade deal with social issues such as poverty and child labor. We must formulate policies that do so. We must sanction offending countries that do not comply with the regiments of regulation and we must suspend or deny products that offend the regiments, for example made through child labour.