Globalization: Who Benefits From It?

On one hand, Globalization has brought prosperity to many, but on the other, it has also given rise to newer challenges and problems. The faster economic growth of markets is associated today with increasing risk of global crisis and recession. Maybe it is time to undertake a review to find who exactly has benefitted from it.
Globalization: Who Benefits from it?
Source - Wikimedia Commons (https://commons.wikimedia.org/wiki/File%3AGlobalisationchart.jpg)

Criticism of Globalization

If you only looked at the criticism of globalization across the world, you may get the impression that it hurts everybody. So there are people criticizing it in developing countries, and there are people criticizing it in the developed world as well. And yet, you hardly come across anybody or any government, seriously trying to isolate their own society or country from the rest of the world. The fact is that every country is not only accepting it, but actually jumping over each other to take the lead in finding new markets for their products, new investors for

their economy, and new places to base their factories. If people are rational and can be expected to go for things that benefit them, then one could safely say that globalization is a phenomenon that everybody finds beneficial, in one way or the other.

Theoretical Analysis of Globalization

If we try to analyze theoretically, globalization is nothing but extension of different social activities beyond political boundaries. The greatest benefit is, as in every other activity, reserved for those who target profit. So businesses, corporations and firms are the ones who find the expansion of markets to their greatest advantage. With thinning of international boundaries, and reduction of tariffs, they can sell more of their products and services. As any economist would tell you, the marginal cost, or the cost of producing a new product, is generally lesser than the average cost of producing a good, because of the fact that the additional production can most often be achieved, to some extent, without making any substantial new investment. Even when a fully new investment is required, the experience and the skills gained earlier need not be learned again, and having a 'brand' means that you do not need to struggle with marketing like a novice. All these allow businesses to multiply their profits, by selling in newer markets.

While the producers gain by selling abroad, the consumers in that market abroad


will buy it only if they get better value for their money, by buying those products. Often, the products made in their own country are of inferior quality and priced more compared to their value, and globalization allows these consumers to have access to cheaper and better quality products. The competition arising from imported products also forces local producers to improve their quality and pricing, resulting in overall greater efficiency of the economy.

Globalization is also a boon for the investors, who have additional capital, but in countries where the cost of labor is very high, the returns on capital are lower, compared to other labor surplus countries, where similar investments provides higher profits. For the labor surplus countries, this investment provides opportunities for employment of the labor, and so reduces unemployment, raises wages and overall incomes.

Globalization Beyond Markets

But globalization is not restricted to business. It goes beyond it, to the field of information, technology, religion and even culture. Internet has united the global community with an incredible flow of information and knowledge in such a way that sitting in one country a resident of a second country can find everything about any third country in the world, something unthinkable a couple of decades back. Same is true of cultural flows and religious beliefs that are now beginning to transcend all political limitations.

One may wish to ask, that if everybody is benefiting, then why so much criticism? The globalization makes the playground larger, but it does not make playing easy. With more competitors, there are bound to be more losers as well. As better equipped or better spirited competitors join the fray from across countries and continents, the weaker will be trampled over. In this struggle, only the fittest survive. Those who can't can only criticize.



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