Globalization influences almost every facet of modern life. The majority of economists affirm that globalization offers numerous advantages to individual economies across the globe by ensuring that markets become more efficient, strengthening competition, restricting military conflicts, and distributing resources equally worldwide. Globalization allows corporations to attain economies of scale that decrease costs and, in turn, back further economic development (Borchert & Yotov, 2017). However, this has the effect of hurting scores of small businesses endeavoring to compete locally. The supporters of globalization feel that it enables developing nations to catch up to developed countries via enhanced manufacturing, diversification, economic growth, and advancement of living standards (Dunne & Reus-Smit, 2017). China offers an excellent instance of a state economy that has reaped greatly from globalization. Outsourcing by businesses makes developing countries benefit from jobs and technology available in developed nations. For instance, the North American Free Trade Agreement allowed American vehicle companies to shift their functions to Mexico, where there was cheap labor.
Globalization facilitates social justice on a global level and has promoted human rights around the world. Despite its countless benefits, globalization has its drawbacks. For instance, it has resulted in price fluctuations (Borchert & Yotov, 2017). Attributable to intensified competition, developed nations are compelled to reduce the costs of their products (Ashenfelter, Engle, McFadden, & Schmidt‐Hebbel, 2018). This is caused by nations like China producing commodities at reduced prices that make products cheaper when compared to the ones manufactured in some developed nations. On this note, for developed nations to retain their clients, they are obliged to lower the costs of their products. This disadvantages them since it decreases the capacity to uphold social well-being in their nations.
References
Ashenfelter, O., Engle, R. F., McFadden, D. L., & Schmidt‐Hebbel, K. (2018). Globalization: Contents and discontents. Contemporary Economic Policy, 36(1), 29-43. Web.
Borchert, I., & Yotov, Y. V. (2017). Distance, globalization, and international trade. Economics Letters, 153, 32-38. Web.
Dunne, T., & Reus-Smit, C. (Eds.). (2017). The globalization of international society. Oxford, United Kingdom: Oxford University Press.