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Some people applaud globalization for removing barriers and bridging political and cultural divides. Some accuse it of upsetting regional economies and displacing workers. The reality is that globalization has existed since antiquity and has permeated every facet of contemporary life. As a customer, you frequently purchase food, clothing, and electrical devices from international corporations based all over the world. Additionally, if you’re an investor, a financial advisor can assist you in diversifying your portfolio by recommending additional overseas assets and emerging market funds.
What Does Globalization Mean?
The process of moving companies, organizations, labor, technology, goods, concepts, and information across national boundaries and cultural boundaries is known as globalization. Proponents claim that this is increasing the interdependence of nations on free trade. However, detractors contend that it is also upending industries, increasing the vulnerability of local economies, and consolidating wealth in the hands of the corporate elite.
The origins of this procedure can be traced back to prehistoric societies who engaged in trade for precious goods unattainable in their native locations. However, you may also observe how big companies now prosper in a manner akin to that of international enterprises, complete with global supply chains and offices.
Trade agreements have emerged as the main drivers of globalization in the modern economy, establishing and growing networks for infrastructure and trade. In 2020, the Trump administration renegotiated NAFTA, resulting in the United States-Mexico-Canada Agreement (USMCA). At first, NAFTA encouraged American companies to move some of their operations to Mexico in order to benefit from cheap labor there. But the USMCA offers more safeguards against this kind of competition for American workers.
The latest $2.3 trillion infrastructure and employment proposal by President Joe Biden has also drawn criticism towards globalization. Biden singled out numerous big, international corporations, such as Amazon, for utilizing tax breaks to evade paying federal income taxes. In order to finance his proposal, the president declared he would increase corporate taxes and abolish these deductions and international tax breaks.
Governments are focusing on breaking down national barriers to encourage international trade, but they are also attempting to safeguard regional economies that are vulnerable to disruption. Let’s examine the benefits and drawbacks of globalization.
Benefits of Internationalization
Globalization can give nations all across the world easier access to goods. Additionally, it offers certain financial advantages to those who would not otherwise have enough opportunities in their current community. The following are the top four benefits of globalization:
- Greater Access to Goods and Services Due to Globalization
It’s difficult to dispute the fact that globalization increases the number of goods and services available to more people, frequently at reduced costs. You are somewhat benefited by globalization if you have disposable income and you purchase goods from overseas. Gaining access to a larger market for their products and services helps business owners as well.
- Individuals Can Escape Poverty Through Globalization
Opinions on the number and kind of jobs generated by globalization vary, making the claim that it has helped people in developing nations escape poverty fairly contentious. However, the conventional view is that globalization has improved job prospects in labor-rich, capital-scarce nations—that is, emerging nations.
- Cultural Awareness Rises with Globalization
Proponents of globalization claim that it has improved intercultural communication and understanding. People are exposed to the culture, attitudes, and values of people in other nations more frequently in a globalized society. Such exposure can reduce xenophobia, fortify international relations, and encourage artists.
- Globalization Facilitates the Ease of Information and Technology Spread
In a worldwide world, things spread more readily than only art and culture. Technology and information are no exception. Consider the growth of microlending or mobile banking in Kenya, for instance. Civil society organizations can draw inspiration from other nations, and ideas can proliferate more quickly.