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What are the Benefits of Globalization?
Globalization occurs when various countries in the world become more connected through trade and business. The benefits of globalization are often debated but have been proved in certain areas. Globalization provides competition and ensures a greater availability of products and services to consumers. Another one of the benefits of globalization is that it helps to provide economic stability in countries that have low economic status. It also provides a comparative advantage, which means that productivity is high because trade is open and resources are used more effectively.
A healthy level of competition keeps prices lower for consumers and helps keep production high. This can be a threatening concept for an industry because it is forced to work harder to stay viable, maintain high production and keep consumers happy, but it is beneficial for those purchasing products and services. Another of the benefits of globalization is a greater availability of products and services, because a globalized market has more businesses offering products and services to consumers. This means that consumers have more choices when it comes to their purchases.
Economic stability is one of the most important benefits of globalization. Poorer countries are able to sell products and services to those with more money, therefore creating economic gain. From a worldwide perspective, this is a good thing, because fewer nations are struggling with poverty. Countries that trade with one another have a vested interest in each other's well-being, which helps keep the political climate more stable as well. It is less likely for a country to wage war on another, for example, if it is reliant on the other for an important good or service.
A comparative advantage occurs in the area of globalization when countries are able to trade freely with one another. This keeps production at an optimal level, because countries are able to produce goods and services in areas where they are most efficient. In theory, with a closed trade system, countries would be forced to produce all of the goods and services that they need. A country is able to produce a product or service where it is efficient, so overall global production can increase because resources are being used in a more effective manner. This also can help the environment because resources are not being wasted, and attention can be paid to greener business practices.
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![In a closed economy, a country does not import or export goods.]()
By: cvalleIn a closed economy, a country does not import or export goods. -
![Some people assert that globalization has come at a great cost not only to the environment, but also to impoverished people worldwide.]()
By: TheFinalMiracleSome people assert that globalization has come at a great cost not only to the environment, but also to impoverished people worldwide. -
![One of the goals of globalization is to reduce worldwide poverty.]()
By: Andrea IzzottiOne of the goals of globalization is to reduce worldwide poverty.
Discussion Comments
I like the idea of trading with other countries and making the world one big economy, but the truth is that some countries don't play fair. Some countries have trade restrictions, and they end up exporting endless amounts of goods to other countries, but then they won't allow other countries to sell goods in their countries. When this happens it is not possible for everyone to see the economic benefits of globalization.
I know globalization is complicated, but as I see it, basically what happens with globalization and free trade is that more people around the world get to work and make money, and consumers are able to get better prices on products. As I said, the actual workings are complicated, but that is the bottom line, and so I think the benefits of globalization are worth the drawbacks. Everybody can't win.
Well, if you look at what has happened in the United States then I am not sure globalization is a good way for individual countries to remain healthy. In the U.S., we have lost so many jobs to other countries because the labor in those countries is so inexpensive that American workers cannot compete. Even if American workers were willing to take less money they wouldn't be able to accept wages as low as workers in other countries--not and still earn enough to take care of themselves and their families.
I think the benefits of globalization are mostly felt by the poorer countries that would otherwise be unable to take care of their own people and keep their economies from going bankrupt. One of the main results of globalization in the U.S. is that we now manufacture way fewer products than we ever have before in modern times.
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