Globalisation – How It Affects Both Trade and Culture
Essay title: Globalisation – How It Affects Both Trade and Culture
Globalisation has made a great impact in the world by helping businesses, technologies and cultures spread throughout the globe. Today there is 12 times more world trade in goods and money than there was in 1945. (Globalisation and trade, 2001) While this can be considered as fact, there still remains a dispute about whether a global marketplace will be beneficial to everyone. Some people believe that globalisation does have the potential to create many opportunities for growth in the world, while others argue that it will increase the opportunity for the developed countries to take advantage of the developing countries as well as reduce cultural diversity to a monoculture. In the article, “India in the face of globalisation,” the author agrees to the negative aspects of globalisation and states that �globalisation has to be combated, tamed or at least given a more human face.’ The following essay will discuss this issue and focus on globalisation in terms of how it affects both trade and culture in today’s world.
There is no doubt that trade will create both winners and losers. Not all countries will benefit from trade, especially those that lack good international competitive skills. If a country does not benefit from free international trade, then it is more likely to induce a form of import control or a measure of protection. (Globalisation and trade, 2001) Protection such as tariffs may help prevent unemployment in certain parts of the economy, but the consumer will be disadvantaged in paying higher prices. The best solution would be to subsidise investment in certain parts of the country where the consumer would not suffer.
The author states that globalisation has increased unemployment and reduced the quality of jobs in many developing countries, namely India. Critics of the World Trade Organisation (WTO) have also stated that free trade has resulted in the poor becoming much poorer. They argue that the developed countries have actually upheld protectionist policies and that the less developed countries do not have the economies of scale and infrastructure as the developed countries have to benefit from free trade. (Globalisation n.d.)
While this all may be true, there is a solution to solving these dilemmas. Less developed countries that have a shortage of money will need investment from other countries. In order to attract foreign investment, governments need to implement peaceful conditions in their country and avoid corruption. The less developed countries also have to be involved in any changes in international trade rules. (Sloman, 2006) These suggestions can help countries whose population are living in extreme poverty.
There are many reasons to suggest that countries can gain immensely from trade. “Trade can benefit all countries if they specialise in the goods in which they have a comparative advantage.” (Sloman 2006, p. 637) This law suggests that countries should export goods in which they have a comparative advantage and import goods in which they have a comparative disadvantage.
Even if there are no comparative cost differences between countries at first, it will still be beneficial for them to trade in industries where economies of scale can be gained. When the economies of scales are achieved, then the comparative cost differences will also begin to show and countries will gain comparative advantage in the specific industry in which they trade.
Another reason in gaining from trade is through increased competition. Competition from imports can increase the efficiency of the country that trades. This may also benefit consumers as it prevents companies from charging high prices. It also encourages better research and development and may even bring the country new technology.
Because globalisation increases economic freedom and creates competition, it increases the productivity as well as people’s standards of living in countries that open themselves to the global marketplace. (The benefits of globalization, 2006) Globalisation offers opportunities to global export markets, foreign capital and advanced technology for the less developed countries. As this will encourage faster economic growth, the result would be that it actually reduces poverty and improves labour and environmental standards of the country.
In terms of globalisation and culture, the author has claimed that globalisation has been the cause of families separating. It has also destroyed people’s culture by creating a global monoculture which is spreading rapidly and will limit their freedom of choice thus ending cultural diversity. Many critics of globalisation agree to this and believe that cultural conflicts, such as religious, ethnic or conflict over resources and territory, will eventually lead to people losing their culture and identity. However, thinking of the world as a planet populated by 6 billion