Globalization: Why The Rich Are Getting Richer and The Poor Poorer

Introduction 

In this paper, we will research what globalization is, how it's influenced our world, and whether is globalization the cause of why the rich are getting richer and the poor poorer.

The Definition of Globalization

For the 21st century, the process of globalization is a topic that has millions of different views. Especially today, globalization is taking on a newer, faster, and more thorough form. This is due, in large part, to political and trade policies that have allowed economic structuring to open up in a way that facilitates both domestic and international trade.

There is no definition of globalization in a universally accepted way. The reason is that globalization includes many complex processes with varying dynamics reaching different areas of a company. It may be a phenomenon, an ideology, strategy, or all together. IMF defines globalization as 'the increase in economic interdependence of countries worldwide through increasing volume and variety of goods and services transactions across borders, international capital flows more freely and faster, but also a wider diffusion technology.'

Globalization refers to the increasing unification of the world's economic order through reduction of such barriers to international trade as tariffs, export fees and import quotas. According to the Oxford English Dictionary, the word 'globalization' was first employed in a publication entitled “Towards New Education” in 1930, to denote a holistic view of human experience in education.

The Waves of Globalization

Many researchers divide the globalization process into two waves: before the First World War and after the Second World War. “There was a long period characterized by persistently low international trade until 1800, globally the index never exceeded 10% before 1800”. This changed over the course of the 19th century, the Industrial Revolution started a huge race of globalization, especially in Europe. The technological advances triggered a period of marked growth in world trade, the so-called “first wave of globalization”.

The first wave of globalization led to the First World War which broke the whole balance in world markets. The post-World War I recession was slow, and that slowness led to the decline of liberalism and the rise of nationalism. “There was a huge drop of growth in the interwar period”. After the Second World War trade started growing again. This new -and ongoing- wave of globalization has seen international trade grow faster than ever before. Today the sum of exports and imports across nations amounts to more than 50% of the value of total output.

Globalists and Anti-Globalists

There are two sides to the subject of “Is globalization good or bad?”. The supporters of the globalization process argue that it has the potential to make this world a better place to live in and solve some of the deep-seated problems like unemployment and poverty. On the other hand, the general complaint about the process of globalization is that it has made the rich richer while making the non-rich poorer. To be more clear, positive aspects of globalization might include; building up the economic and social structures of struggling countries, learning about and sharing of new and interesting cultures, and the opportunity to fight with serious issues like unemployment, disease, and natural disasters. Globalization has perks, but there are some arguments about it. They include; the maltreatment of weaker and poorer economies by those that are tougher, the creation of a single world culture, and the process of the rich getting richer and the poor getting poorer.

Are the Poor Getting Poorer?

Poor are getting poorer is the biggest argument of anti-globalists. After the devastation and losses of World War II, the world population stood at about 2.5 billion and many people feared that famine would spread, that gaps between the rich and the poor would increase, and disorders would become ever more frequent. However, “around the globe, despite significant differences from country to country, life expectancy has increased from 48 to 71 years and per capita income has expanded by 500%”.

According to IMF’s research in 2007, globalization is good, and not just for the rich, but especially for the poor. The growing economies of India and China lifted 200 million people out of abject poverty in the 1990s as globalization took of. “In the next eight years, almost one billion people across Asia will take a “Great Leap Forward” into a new middle class.” As a worldwide example, since 1990, the share of people in low-income countries living in extreme poverty has diminished from 47% to 14%. And progress is not just demographic. Over the last ten years, major discoveries have been made, such as three-dimensional printing, the first implantation of an entirely artificial heart, and cancer immunotherapy to name a few.