The Concerning Effects of Globalization on our World

As the modern world advances, so do business practices.  These modern day “retail giants” have shown the world just how much a profit means to them, even if it’s against their own people.  This is due to globalization, or the increasing of interconnectedness of the world through common processes of change. Large businesses have taken advantage of this process, leading to the division and damage of economies, environments, governments, and cultures.  While change can benefit certain parties, it also severely damage others. Society has progressed through technological advances, but as globalization develops by increasing international relations, it pulls society apart through economic division.

Over the past decades, the world has become increasingly connected due to new technology and other advances.  This increases interconnectedness, or globalization, has had multiple effects on our world. The recently most apparent being the economic division in both producer and distributor nations.  This is due to the ever increasing gap between the rich and the poor, as seen on the graph below below:

As shown on the graph, only 2.7% of the world’s wealth comes from 70% of the world population whereas almost 46% of the world’s wealth comes from the top 0.7% of the world population.  This drastic inequality of wealth can be attributed to the increasing globalization in our world. As a business closes its plants in its mother country, unemployment increases as these jobs are brought to foreign nations with less labor laws creating cheaper labor.  As a result the few executives of the business reel in massive profits, as prices commonly don’t drop due to lower costs of production; their previous employees must find new jobs, which tend to pay less as job demand increases. This profit-maximizing scheme awards executives with wealth while taking from the workers, the larger party.  The same result can be seen in the foreign nation as the workers are paid as little as possible, while the factory owners and shippers reel in big profits from wealthy overseas businesses. The week 6 reading from class even goes as far as saying, “low-technology manufacturing and assembly functions were being located amongst the world’s poor”.  This unhealthy system has been rapidly deteriorating economies as the gap between the rich and poor increases.   

The idea that globalization has pulling society apart is not a new one.  People have been fighting big businesses that move overseas for years, but to no avail.  The top few elite business owners and politicians rule the international market. As stated in one article, “Globalization is a house of cards built on a hill of sand on the shore of a stormy ocean, but the global ruling elite of political and economic leaders continue to sing the praises of their rickety construct while ignoring both its painful side effects and its risk of collapse”.  The elite gaining political power creates a social/cultural inequality that separates the elite from the majority of the population. The wealthy elite are able to gain this power and control as detailed here, “wealth can be seen as a “resource” that is very useful in exercising power. That’s obvious when we think of donations to political parties, payments to lobbyists, and grants to experts who are employed to think up new policies beneficial to the wealthy. Wealth also can be useful in shaping the general social environment to the benefit of the wealthy, whether through hiring public relations firms or donating money for universities, museums, music halls, and art galleries”.  Due to this fact, that the wealthy elite have power in their nation, economic progression with a more even wealth distribution is very difficult to create. The elite have no reason to share their wealth, and therefore use it to create power at a political level to maintain their wealth. As a result, a great cultural inequality is formed as specific groups are underrepresented or unheard.

While globalization has divided society, it also has its benefits that bring certain parts of society together.  The major benefit being the fact that globalization lowers prices and makes some goods more attainable. I only say some because there’s always a possibility that these goods would be more attainable if more people had higher paying jobs of production in their nation.  Low prices attract everyday consumers, which makes them purchase from big businesses outsourcing in foreign nations. This leads to the common misconception that these businesses benefit the people. After the benefit of lower prices comes the benefit to the nations. Both the mother country and the producing country rely greatly on import/export taxes.  These taxes account for a great deal of income to these national governments, and help decide leading nations in the world. Among these benefits sits a few more as stated in this week 7 reading, “Surpluses of capital and shortages of labor (or rigidity in labor markets because of political and institutional barriers) can be “fixed” either by the movement of capital to areas of labor surpluses and/or weak labor organization (hence North American capital moving into the maquillas along the Mexican border) or importation of cheap labor (as with guest worker programs in Europe) into centers of capitalist development”.  As described, globalization can help a nation together in a few different ways. While these are benefits to the nation and the nation’s elite, in the long run they still don’t benefit the majority of citizens. This eventually causes division in a nation, bringing the people and the nation apart.


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