The Backlash Against Globalization
Running head: THE BACKLASH AGAINST GLOBALIZATION
The Backlash Against Globalization
Karen M. Schorfheide-Ray
New England College of Business and Finance
Abstract
Despite the benefits listed above, the disadvantages of globalization have caused a sometimes violent backlash. The disadvantages created by globalization include decreased wages or loss of jobs due to outsourcing; reduced demand for less-skilled workers; and less corporate accountability. According to Schwab and Smadja (1996), “…no individual, corporation or country will be able to seize these new opportunities [provided by globalization] in a social vacuum.”
The Backlash Against Globalization
The Merriam-Webster Dictionary defines globalization as “the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets.” Globalization has been made possible because of advancements in technology, communication and shipping. According to Han et al (2003), it is because of these advancements that “many of the largest companies can realistically consider nearly every location on earth as either a potential market or site for business operations.”
Benefits of Globalization
Globalization has many benefits, both for the companies that are globalizing as well as the economies of the countries participating in this globalization. International trade, a key component in globalization, allows “a country to specialize in producing those goods and services in which it is most efficient. It can then trade those products to other nations in exchange for goods and services it desires but does not produce” (Han et al, 2003).
This increased efficiency benefits the companies that produce the products by increasing their profit margin. Shareholders benefit from the increased profit margin by receiving a greater return on their investment. The citizens of the countries participating in this globalization benefit by enjoying a wide “range of products from around the world sold at prices that reflect intense competition” (Elliot, 2006). Finally, the economies of the countries participating in this globalization benefit: according to Walker (2007), “[l]ess developed countries win because they get jobs making low-cost products for rich countries, while rich countries win because they get to sell more sophisticated products to emerging economies.”
The Backlash Against Globalization
Despite