An Analysis of The Pros and Cons of Globalization and How It Affects Global Economy

Introduction

Several aspects define globalization, and it has a broad meaning that mainly dwells on the changes occurring on the social, economic, and political lines in the world today. According to Sassen (2015), globalization has made the world presume a single nation. In business, globalization has transformed the world economy by making the world look like a single village. Transactions are easy to make, and likewise, goods can be purchased with much ease. However, globalization has brought in some negative implications in different critical sectors in the world. This paper seeks to explore both the negative and positive impacts of globalization in the global economy.

Positive,  Negative Impacts

Positive

Researchers have found that globalization has created efficient markets for investors while improving the living standards of the consumers (Crane, and Matten, 2016). Markets have been opened for investors all over the world to provide customers with what they are willing to sell. This has allowed expansion of business globally since bigger sales guarantees profits which are rolled back to the firm to increase investments. Through globalization, investors have also outsourced goods and services which have enabled them to reduce the cost of production. Consequently, they have expanded their sales and consumers have a wide range of goods and services available for them at affordable process.

According to Crane and Matten (2016), globalization has increased competition amongst the producers. The producers are competing for a hold of the economy. Venturing across international borders forces investors to abide by the global market standards of goods. Fighting for a market share together with adherence to global standards has compelled the companies to improve the quality of their goods. The availability of high-quality goods has allowed consumers to choose from a wide range of options. The existence of competition has also led to lowered prices of goods and thus improving the living standards of the persons living in third world countries.

Negative

A critic of globalization has pointed out that it has negative impacts that are detrimental to third world countries in various ways (Clark, 2014). They have argued that the rise in globalization has exacerbated income inequalities. The income inequality has created a rift between the industrialized and less industrialized nations.

Income inequality has risen since the industrialized nations are the main investors and thus they are the main beneficiaries while the third world countries will just have the opportunity of buying cheap goods while profits are taken to develop the mother countries of investors. The domination of the global commerce by transnational companies compounds the poor development in their area of development since they maximize on profits.

Conclusion

From a superficial analysis, globalization has brought forth greatness to the world economy as well as demeaned the developing nations. Though it is accompanied by weaknesses, globalization has managed to liberate and change the world economy by a greater margin. The weakness of globalization can be managed by putting in place the necessary policies that would bring to an end its negative implications.