Reaping the Fruit of Globalization

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Wearing a made-in-China T-shirt, he came out from his Toyota SUV and merged into the crowd that was gathered by an anti-globalization organization through its website. This is an ironic cartoon that I have seen before. Numerous arguments are raised against globalization nowadays. Some argue that free trade will eliminate jobs and cause loss in their domestic economy, and others argue that globalization causes degradations of environmental and labor standards. (Wikipedia.org, 2008) However, they mainly focus on the cost of globalization; they do not consider the benefits or possible alternatives for reducing the cost while still reaping the benefits. Globalization benefits us in at least two ways: it will create wealth and will eventually promote environmental and labor standards.

       First of all, international trade will create more wealth and lead to benefits for all. According to Roger.L.Miller,(2005), an authoritative economist, economic theories of comparative advantage suggest that free trade leads to a more efficient allocation of resources, with all countries involved in the trade benefiting. Let us interpret this idea by using an individual example. I can type 1 page per hour and write 1 page per hour, while Tom can type 2 pages per hour and write 1 page per hour. Given 2 hours to do both works individually, the total output will be 3 pages typed and 2 pages written. What if I specialize in writing and Tom specializes in writing? The joint output will be 4 pages typed from Tom and 2 pages written from me. The extra 1 page is a result from specialization and free trade. Now we can just replace individuals with nations. World wealth will be greater when countries specialize in producing the goods in which they have a competitive advantage and then engage in foreign trade. On the other hand, while those critics argue that free trade eliminates the jobs in importing industries and causes loss in their economy, we also can see the jobs in exporting industries are increasing. In his speech about the effects of globalization, Tom G. Palmer, a senior fellow of Cato Institute, responded, “free trade does not affect the number of jobs, but it affects the kinds of jobs people have.” In another word, it increases the jobs they have a competitive advantage and eliminates the jobs they are not efficient in. As a long run, free trade leads to a more efficient allocation of resources and creates more wealth worldwide than a closed economy.

       Globalization is not only economically but also environmentally beneficial to human beings. There is a misunderstanding among anti-globalists. As Akin L.M. writes in his article “Poverty and Environmental Degradation”, globalization causes rapid population growth and consequently causes deforestation, desertification, biodiversity loss, urban pollution, water pollution and climate change. The opponents simply view globalization as the root of damage to the environment. However, the fact is that, as long as human beings develop in this planet, the negative effects on environment will exist even without globalization. The real root is the development of human beings, and it is inevitable. We should try to solve the problems result from our development instead of criticizing and being against globalization. Since the concept of “Protecting our earth” spread all over the world, more and more people who support globalization have taken steps to counteract the negative effects. According to “Confronting Anti-Globalism” (Business Week, August 2001), Home Depot Inc. has adopted an eco-friendly lumber supply program with Rainforest Action Network; Starbucks Corp. is working with Conservation International to buy coffee from farmers preserving forest. Another argument concerns that globalization drives capital flow to where environmental and labor standards are lowest, and consequently makes environment and labor standards worse and worse. But check the facts. “Investors invest where returns are greatest, which tends to be where labor is most productive, which is where people are correspondingly richer,” responded Tom G. Palmer, “and richer people tend to demand better, not worse, environmental amenities and working conditions.” Therefore, globalization will eventually cause a race to the top environmental and labor standards in the future.

       Generally, people around the world are more inclined to credit globalization for the benefits they are reaping, according to a research “The Pew Global Attitudes Project”. Even though globalization is not 100 percent positive, the more than 50 percent benefits are essential for the development of human beings. I would like to give the anti-globalists an old adage: “When goods cannot cross borders, armies surely will.” I believe, under the circumstance of globalization, the world will create more and more wealth, and with everyone’s concern, globalization will eventually create a beautiful home for us all.