The Impact of Globalization on Income Distribution

Globalization is a concept that has had various definitions from different scholars. Nonetheless, globalization has been widely accepted as the tightening of the worldwide interconnectedness in the various aspects of the modern day life. According to Bird & Stevens (2013), globalization can be perceived in business, social life, political systems, and financial issues. Similarly, globalization touches on all the aspects of the contemporary social life. As posited by Sassen (2009), globalization is a multifaceted concept that can be viewed to encompass trends in the cultural, political and economic tendencies of human beings.  Globalization has an impact upon the nation, by affecting the political, social, and economic interests of a national society. While globalization is associated with several benefits essential for the growth of developing countries such as increased income levels, growth of healthcare and education sectors as wells enhanced economic growth, it has led to a broad range of negative effects not only on national level, but also around the globe. In light of this task, this paper seeks to provide an argumentative research-based essay arguing for the opposition of globalization by exploring how globalization affects income distribution; causes insecurity and increased levels of terrorism; has led to loss of national identity; and Intensifies competition and compels countries to dangerously lower environmental standards

To start with, globalization affects income distribution. While some economists view globalization as a potential benefit to countries, Goldberg & Pavcnik (2007) argue that globalization poses a fundamental challenge to the distribution of income. In this case, globalization trade openness is of great benefit to disadvantaged people in wealthy nations and not those in developing countries. To illustrate, globalization tends to favor developed countries or established corporations at the expense of developing countries or smaller companies. Such developed countries have the autonomy to decide what is right and wrong for them. Here, the critics of globalization argue that globalization is an idea of rich nations and their multinational organizations. As a consequence, they may come up with policies that no country or company will have the powers to oppose. The proceeds gained might not be evenly distributed subsequently resulting in income inequality. Also, “developed countries dominate and control the international economic system in a bigger, deeper and intensive manner thus influencing the outcome of decisions made” (Sassen, 2009). On the same note, globalization can make large corporations to evade paying taxes in countries where they operate. Through that, the host countries are unable to raise sufficient funds required to meet their budgetary obligations. Similarly, as demonstrated by Pieterse (2015), globalization makes the rich richer and the poor poorer. That is because, developing or underdeveloped countries may not have the ability to compete with other established economies across the globe, and they are likely to crumble underneath the competition. Hence, globalization causes inequality in the distribution of income.

Consequently, globalization causes insecurity and increased levels of terrorism.  Levitt (2013), argue that globalization has been behind the weakening of various countries due to issues of insecurity. Also, globalization has intensified global terrorism. Because of that, countries across the world have been dragged into a situation in which security and stability will no longer be sustained as expected. Further, Levitt (2013) contend that globalization has eroded nation’s state power. It has also changed the international environment into a multicultural and multidimensional atmosphere whereby countries are no longer the primary determinant actors. It is evident to ascertain that globalization has altered the role of the state to an exquisite extent. Before the emergence of globalization in the current society, the state was perceived to possess the highest authority and power with full sovereignty whose internal function was to govern and provide resources for its people (Oman, 2014). Similarly, the state was tasked with an external function of acting in the world politics (Pieterse, 2015). However, the evolvement of globalization has changed the role of the state in political, social, economic and technological. The political function of the states has been changed because the relationships of various states have been strengthened (Pieterse, 2015). For this reasons, states can progress in power while working together. Therefore power in the globalized world is regarded as economic progress. Another perspective underlying the changing and reducing of the state’s sovereignty is the fact that states have become highly dependent on each other following the emergence of globalization. This can be illustrated by the case of Britain and other Western countries that highly depend on the United States for both military and financial support. Therefore it is imperative to ascertain that the role of the state has been altered in that it has become dependent instead of being authoritative (Oman, 2014). Moreover, globalization has created some conditions that can prompt the use of violence by various countries in a bid to realize their political objectives. Apart from that, globalization has enhanced communication thus making it easy for terrorist groups to execute their threats or conduct terror attacks which cause massive deaths. Besides, media and communication technologies have enabled terrorist organizations to spread propaganda and hate speech further than ever before causing tension and instability. For that reason, it can be argued that there is a cause-effect relationship between globalization, insecurity as well as terrorism.

In addition, globalization has led to the loss of national identity and culture.  To some exquisite extent, globalization has diminished the virtue of nationalism. This is because of the weakening of national barriers resulting from the rise in interdependence. Moreover, the compression of space and time has given more opportunities for individuals to interact intensively thus leading to the decline of national differences (Bauman, 2008). As such the national variations have become less significant. According to Meyer (2000), the fact that the world is expanding and shrinking has undermined the value of national borders, thus, due to globalization; the potential of nations to keep individuals of the same nation together has been declined. Furthermore, Ozga, & Lingard (2007) point out that the common state of nationalism cannot be compared to that of the19th century. In the ancient times, the national identities had a strong sense of the individuals of the same nation. However, integration in the current world has declined the level at which people can be identified with a particular country. Important to note is that such integration has resulted in more conflicts among various people. This is because when people from varied nationalities interact, disputes may arise. Besides, ”the current era of globalization and its unprecedented acceleration and intensification in the global flows of capital, information, and labor has had a significant influence on the culture of different countries across the globe” (Bauman, 2008). In this regard, globalization brings a great loss in the uniqueness of local culture. As a result, people or countries are subjected to the risk of losing their identity, exclusion and even conflict.  The trend is prevalent amongst traditional societies and communities who are exposed to modernization and imports from other countries. Therefore, with globalization, every country will run and function the same way. The deeply rooted cultures will be lost due to factors such as immigration and western influences. From that, it is evident that globalization leads to cultural loss.

Moreover, Intensifies competition and compels countries to dangerously lower environmental standards.  According to Bauman (2008), ”because of the competitive nature of the world economy, each country wants to sell its goods and services at the lowest price possible,” to do so, states may lower the wages of their workers, use relatively cheaper polluting fuels, and allow more pollution. Additionally, countries may decide to debase their currency with the hope that such move will create inflation and lower the value of money compared to other currencies across the world. As a consequence, the prices of imports increase, the supply of money considerably reduces resulting in asset bubbles such as artificially high prices of bonds as well as high stock market prices. Further, the asset bubbles cause investment crashes. Thus, globalization is risky for countries because they opt to withstand the intense competition by dropping the value of their currencies (Bauman, 2008). Consequently, globalization encourages dependency on other countries. In line with Ozga & Lingard (2007), globalization allows countries to access global markets where they obtain various goods and services at relatively affordable prices. Because of that, countries may be tempted not to engage in the production of goods and services because they know that they can be obtained from other countries at a cheaper cost. That increases dependency since countries will be relying on imports. As long as the system remains together, nations across the globe will continue to benefit from globalization. Nonetheless, if the inbuilt instabilities within the system become too great, there is a high probability that a trend, where countries rely on others for goods and services, will be disrupted subsequently leading to severe problems (Aizenman & Jinjarak, 2009). Apart from that, globalization makes countries to be interdependent, if one of them collapses, then the ripple is likely to be experienced through the entire system consequently collapsing other countries in the system too. Furthermore, it is ascertained that foreign competitions are there regarding the employment opportunities in various companies or organizations. The nations that imports and do not export as much would soon be kicked out of the international markets and the foreign exchange needed to fund their imports, through the requirement either to end importation or to recommence the exportation of their products. Neither the extending of the emerging economies nor the rising distinction of offshoring alters the sense of ”mutually advantageous trade” as provided in the principle of comparative advantage. Therefore, the employees in the disadvantaged countries will continue to low wage rates as well as low standards of living because of the global economy. Bauman, (2008) points out that ”because of the global economy, there have been various mistreatments concerning the employee from developing countries working in other regions.”

Conversely, the proponents of globalization claim that it is beneficial because it considerably increases the levels of income. In this case, globalization creates more job opportunities, thus addressing issues of poverty. Similarly, globalization grants people more business prospects, thereby improving their lifestyles and making them to be more self-reliant. Moreover, the proponents claim that globalization results in the growth of education and healthcare sectors. It also leads to economic growth and increases access to global markets. In refuting such claims, globalization only favors developed countries. It does not result in economic growth of all the participants. Developed countries in conjunction with their multinational corporations dominate and control the international economic system. Such companies also use their power to influence some of the decision made by host countries. They may even engage in malpractices such as tax evasion. That derails the process of economic growth and reduces the revenue available for the government to meet its budgetary obligation. Because of that, the expansion of health and education sectors is considerably affected.

Lastly, despite the fact that globalization increases access to global markets; it encourages dependency on other countries since goods can be obtained more quickly and at relatively affordable costs. That is disadvantageous because, in times of a crisis, countries may be subjected to severe tragedies such as famine. It might also disrupt the normal functioning of other sectors of the economy.

In conclusion, it is evident from the discussion above that as the world gradually continues to become a global village, globalization poses various adverse effects. To start with, globalization causes inequality in the distribution of income whereby rich countries or economies continue getting richer whereas the poor keep getting poorer.  It has also intensified insecurity and terrorism. In this particular case, globalization has facilitated the manner in which terror groups communicate, plan and execute their attacks. That has led to instability, tension and massive loss of lives and injuries when such attacks occur. Moreover, globalization leads to loss of culture. As a consequence, countries and their respective communities are subjected to conflicts, exclusion as well as the loss of their identity. On top of that, globalization is disadvantageous because it encourages dependency on other countries. That is risky in case of a crisis because countries rely on one another. Besides, the interdependency is dangerous because if one country collapses, the ripple destabilizes other countries as well.  Globalization intensifies competition amongst states compelling them to engage in activities that might be detrimental to the environment in a bid to sell their products at the lowest price. In spite of the fact that globalization has brought various benefits to both developed and developing countries, the disadvantages surpass the advantages gained from it.

References

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