Where Do You Stand On The Globalization Debate?

Globalization is at best a controversial issue, and to add to the controversy are the number of facets by which this topic can be debated. From the nation state perspective, sovereignty and trans cultural feasibility, to universal individual rights, and the world economies effects on the local economies. I would like to focus on this issue from a political, andeconomic standpoint, and whether the benefits, or disadvantages outweigh the other.

“A widening gap between the richest 10 percent and the poorest 10 percent in recent years, with a significant part of the reason related to different abilities to reap gains from globalization.” (Lairson and skidmore, 2003, p. 131) this many people see as a problem because it seems the rich keep getting richer, and the poor poorer. But like any issue, the real problem is usually hidden. This inequality is designated as, bad, because it is, unequal, and unfair, but before the conclusion of this being unfair, there is the preconceived idea, that equality is a right. However, while all being created equal, we were not all created with wallets. While this may at first humor it does hold truth, a preset, equal income is not a right, but rather our income is an occurrence brought on by our circumstances. Which none can guarantee will be the same for all. Equal rights, are based on universal human attributes, but true equality can and will never occur, for the simple reason that, I will never be the same as you.

Another argument against Globalization is, that it costs jobs, but once again we must find the underlying why, why does globalization take jobs from some countries? And the answer is comparative advantage. “The country with the lowest opportunity cost has a comparative advantage and should specialize in the production of that good or service.” (Swanenberg, 2005, p. 10) By contry (x) having a comparative advantage in Corn production over country (y), country (x) should therefore switch to a concentrated corn production. And as equal and opposite, country (Y) has a comparative advantage in producing oranges over country (x) . And like wise, country (y) shifts it’s production to oranges. So that each comes out with the benfits of more of each product.

Sounds good, right? Well hear is the problem. By country (x) bringing cheaper corn to country (y)’s market than the corn growers in that country can afford to sell their corn for, , it consequently, puts the corn farmers in that country out of work. However, remember the comparative advantage, all that needs to happen is the corn farmers need to convert to Orange farms, and then recieve an advantage over there former occupation due to the new market. So the real problem is the begining change and the shock it will bring, but in the long run, globalization, can increase world productivity.

11/01/11

References:

1) Thomas D. Lairson, and David Skidmore, 2003, International Political Economy, Globalization and the World Economy

2) August Swanenberg, 2005, Macroeconomics Demystified, Introduction to Economics