McDonald’s, Nike and Apple. Three large superpowers of different industries, yet they share one thing in common; globalisation. I reckon that 99.9% of the world’s population would instantly be able to recognise the logos of these companies with ease. However, there is great discussion on whether globalisation is beneficial to society or not. As an economist, I only look at the monetary gains or losses in globalisation, although there is a much wider spectrum of impact from globalisation.
Yes, globalisation can mean jobs, investment, growth and employment but at what cost? Well, we only have to look at countries such as Bangladesh and Pakistan where workers can not only be underpaid, but maybe only of primary school education age. Multinational corporations seem to have little regard for their workers and the conditions they work in, why? MNC’s revolve around maximisation of profit and to do this, costs must be minimised. Pretty logical isn’t it. This lack of social empathy for populations is making globalisation more hazardous than advantageous.
Globalisation has also meant that some countries can be crowded out in producing some goods, as more often than not, it comes down to where the MNC’s can produce at the lowest cost. This an economic concept of absolute and comparative advantage; I won’t bore you with the details but basically, one country will specialise in a good and produce more of it due to lower opportunity costs in production.
Interestingly, I came across another aspect of globalisation I was unaware of; this is the globalisation of crime i.e. the increasing connectivity of crime across international borders. The variety of crime is unprecedented, from terrorism to traficking and even tax evasion! Strangely, I feel quite stupid for not thinking about this before and not seeing the bigger, global picture…. the name “globalisation” seems very fitting in this case.
So what’s good about globalisation? Well it’s probably allowed you to read my blog! (You probably didn’t laugh but oh well….) But on a more serious note, globalisation is good news for us. It allows inter-country trade and access to new markets with goods which wouldn’t be previous available to us. Globalisation has made the world more connected than ever before and would be unwise to not recognise the opportunities that come with it. Some third-world countries have developed upon recognition. Globalisation has acted as the foundations for economic growth, especially for countries such as India and China; I can imagine it will continue to do so, as the middle classes of these countries expand and begin to demand a wider variety of goods.
So all in all….globalisation, it’s a bit like marmite isn’t it. You either love it or you hate it, but we couldn’t do without it.