Philosopy 108 December 15, 2011 Ethical Issues in Economic Globalization Abstract This paper applies a comparative approach to the ethical issues surrounding economic globalization. An analysis of the commonly debated issues and claims is represented by two arguments. Proponents of economic globalization believe that it advances the economic, technical, cultural, and intellectual interests of the global community. Anti-economic globalization proponents believe that it is harmful to global economic welfare across the same dimensions and that it tends to inequitably victimize the global community.
I. IntroductionGlobalization is not a new concept. It is a historical phenomenon that has been going on since ancient civilizations began to expand their territories. Globalization can be defined as the growing integration of national boundaries in favor of a shared economy, culture, and worldwide political and economic integration. Economic globalization is a specific type of globalization that focuses on the process of increasing economic integration, which leads to a global, or single, world market.
While this appears to be unstoppable, the debate about the positive and negative consequences of economic globalization is not.There are, and there will continue to be, plusses and minuses and costs and benefits related to economic globalization. However, the impact and consequences on human beings lives, and on their nations, is extremely important to them. Economic globalization has shown signs of increased and more intense interconnections, that affect more people than ever before, in the last two decades. The underlying assumption of economic globalization is that the, “primacy of economic growth.
.. is thought to be benefiting the whole planet” (Passas 4).Country after country, through choice or force, has promoted free-trade and consumerism, and has de-regulated governmental control of business. Countries have adopted similar economic models, even in the face of significant differences between developed and developing economies, and this has led to both positive and negative consequences. This paper focuses on the ethical aspects of two arguments in the debate: 1) That the benefits of economic globalization outweigh the negatives of it, and 2) that the benefits of economic globalization do not outweigh the negatives of it.
II.Argument for Economic Globalization According to International Monetary Fund, global conditions have improved significantly and economic globalization has been an indispensable part of the solution (Gardner 1). Some economists believe that the circumstantial evidence in support of economic globalization is overwhelming. There is a reciprocal relationship between a country’s economic expansion and its level of international trade.
This is evidenced by the important role that international trade and investment played in the economic successes of Japan, East Asia, and now China.The World Bank conducted a study where developing economies were examined according to their participation in global economy (Griffith 3). The ratio of exports to total gross domestic product (GDP) had doubled in the last two decades in some countries (China, Mexico, and India). Economic theory explains that trade should benefit all parties and it allows for countries to specialize in products that they have the greatest advantage in producing. When countries specialize and trade, the argument goes, the whole world’s productive resources of labor, physical resources, and time are used more efficiently.
This, in turn, increases global competition for goods and allows consumers and businesses to seek out the best deal in the global market. Producers gain the advantage of having increased incentive to compete. Financial capital will then flow toward the most productive investment opportunities, no matter where in the world they are. National economies can then draw funds on international capital markets when they need it, while still being able to diversify their risks and protect their savings by investing outside of their own borders.People, within these countries, are said to have the advantage of better health, increased access to education, have improved infrastructure for transportation, gain advanced communication and energy access, gain governments with greater transparency, enjoy more supportive legal and institutional frameworks that support the competitive market, have a stable economic environments, gain intellectual property protection, and gain access to technology and products.
Unemployment rates are thought, in this view, to be a function of the ebb and tide of international competition. Global unemployment is, for the most part, a result of reallocations of jobs from one industry to another (Griffith 3), due to changing productivity. This normal displacement of the flexible workforce requires that people move between different employers, to different geographic areas, and to different occupations; however unemployment rates are said to remain fairly stable.Some economists go so far as to say that low-wage workers in high-income economies (the United States for instance) suffer from increased competition that is the result of advances in technological innovations and not economic globalization. The labor market rewards skilled workers with higher pay who are better equipped to use these technologies. Low-wage workers are predominantly in service-oriented industries and imports from the global arena do not actually compete with these wage-earners.
Economic globalization, in other words, is not responsible for the shape of income distribution... echnology is.
In developing countries, economic globalization will result in unequal opportunities, but this is viewed as necessary and “just” in the provision of opportunities, for so many who will still earn less than they would in comparable positions in the United States or other developed economies. The degree of inequality among nations has risen in recent centuries, of course, but this is because some countries failed to follow the prevailing models of economic growth. Economic globalization brings large sums of money to depressed economies.While many times it is only a small portion of the population that benefit from the foreign investment, it still helps to increase the economic power of that nation as a whole.
Many East Asian countries are prime examples of this. Malaysia was on the brink of economic collapse, yet through foreign investment, they have been able to maintain a normalized economy which has stabilized greatly since Western nations became involved. These nations also have begun their fight for normalized wages and worker rights; the sign of economic democracy.While there might not be ideal working conditions and wages for each of the individuals, overall, this cash infusion is a huge boon to the emerging economy.
Continued investment in these countries also demonstrates a continued faith in an emerging economy and encourages subsequent investment from other sources. Economic globalization also goes a long way in promoting high quality standards on a business level and on an environmental level. With many developed countries investing money and time into developing countries; these economically rising nations are encouraged to meet industry standards.Increased focus on environmental guidelines continues to strengthen developing countries.
Waste and pollution are increasingly minimized as time goes on. Multi-national companies have great self-interest in operating responsibility toward the environments they expand in and understand that they must create allies of the people who inhabit these locations. It would be counter-productive and economically unsound to behave otherwise. All of the pieces work together for the good of the greater.
III. Argument Against Economic GlobalizationEconomic globalization carries significant moral implications and inequalities across the board. These concerns are tied to human decency issues, to environmental issues, are potentially catastrophic to the domestic workforce, damage international relationships, and damage the very fabric of a nation’s psyche. Some economists and others have termed economic globalization, “The race to the bottom,” which is characterized by environmental destruction, worker exploitation, and cultural annihilation.In the name of economic development and free markets, low and middle-income countries have come under pressure to grant unrestricted access to their resources, work forces, and consumer markets.
Unregulated political, governmental, and private jurisdictions are pressured by profit-seeking industries to lower their environmental rules and labor standards; or suffer the consequences of lost jobs, decreased economic clout, and lost political or military power. The process of economic globalization undermines the foundation of social norms that regulate the behavior of individuals and societies (Keenan 1).Relationships are disrupted and communities’ abilities to self-regulate are affected negatively. People, communities, and countries are left indefensible because the ability to self-regulate and intervene in injustice has been eroded and replaced with alternate motivations. Through a process called reputational segmentation, people or corporations who want to participate in activities that usually carry social sanctions, can now carry-on with undesirable actions in places where they are immune to social sanctions.The most obvious example of this is in sex-tourism.
However, the same incentives that drive individuals to disregard social norms when away in a foreign country, can also allow corporations to engage in actions that would be reprehensible in their native countries. Human trafficking, for the purpose of obtaining a captive workforce, has become more common in many nations. Human beings become merely part of the supply chain to achieve the desired product in this or that factory or manufacturing plant.Other workers are paid such low-wages, work such long hours, and endure such deplorable working conditions that their position within companies begins to look like slavery.
Some people argue that the human rights violations associated with economic globalization have fostered and encouraged increased global terrorism, as a natural consequence of the behaviors of powerful, multi-national companies and interests. Host countries, to foreign economic interests and businesses, often turn less than a blind-eye to these actions and actually participate in, or foster, reprehensible policies and actions.The fabric of nations is often further eroded, as the host-country political and social leaders participate in the entrenched negative activities for personal gain. While some people will argue that economic globalization is inevitable and that there are really fairly benign social and cultural consequences, others argue that these consequences are the result of a deliberate set of economic and political prescriptions made by heads of state and heads of corporations in the more powerful developed nations.
The damage to other countries’ people, resources, and cultures are viewed as acceptable losses. In addition to labor and human rights violations, environmental issues are of great concern. While developed nations have significant laws in place that regulate and control the amount of pollution, waste, and overall environmental footprint that manufacturing can cause, these restrictions are much less evident on a global basis in developing nations.If global trade is best advanced through having each country supply the product it is best qualified to produce, then it cannot be justifiable to destroy environments and cultures that provide the entire globe with sources of certain non-renewable resources. In traditional agrarian-based societies that produce, consume, and trade on a local basis, the impacts on the environment have been predominantly local in the past.
Economic globalization has altered the scale of the environmental impact on one society after another.In the name of economic development and free markets, many countries have come under pressure to grant unrestricted access to resources and have not been encouraged to enact legislation to protect their own resources or people. An example of this at a particularly large magnitude is the rain forests. Africa has suffered deforestation at twice the world rate and some sources claim that deforestation has already wiped out roughly 90% of West Africa’s original forests.
Nigeria lost 81% of its old-growth forests in just fifteen years (Merson 431).The degradation of forest ecosystems has, in large part, been attributed to economic incentives that make forest conversion appear to be more profitable than forest conservation. This is extremely counter-productive, in a global sense, when one considers that deforestation releases 1. 5 billion tons of carbon each year into the atmosphere and contributes to 20% of global warming effects. The water cycle is greatly impacted as well.
One study reported that, during economic and manufacturing expansion in a region of China, the annual precipitation decreased by one third between the 1950s and the 1980s (Merson 432).While economic globalization is applauded for contributing to improved overall wealth and stability of many nations, the health risks to the global population have often increased as global economies merge. There is often lack of harmonization in trade related rules and legislation, via the World Trade Organization (Merson 433). For example, often there are no international guidelines banning a hazardous material or regulating levels of toxic materials incorporated in foods and other items (e. g. mercury levels in fish, and lead in child car-seats made in China).
While the country that produced or generated the undesirable and harmful food or item cannot distribute it directly to a country that prohibits it, another country who acts as a supplier of it may impose strict trade-sanctions as a means of manipulation. Intense lobbying from businesses and countries having lax rules make it likely that there will be compromises toward less protection and the foods or items are cleared for global distribution. It is common practice in the global market for manufacturing techniques that would not be allowed in the developed nations to be allowed in developing nations.Furthermore, the continuing land degradation, rural unemployment, food shortages, urban overcrowding, and unchecked overpopulation in many countries, that has taken place as a result of the globalization of economies, has led to decreased ability of poorly regulated governments to respond to health issues and emergencies.
Global spread of infectious diseases and pests have escalated dramatically. However, economists who promote the benefits of economic globalization rarely tally these costs to the global community.There is also great domestic concern over the increase in economic globalization. While Americans like to cling fervently to a sense of national pride, citizenship, and independence, the collective success of industry that helped to instill these qualities is leaving the country.
In a well documented spiral, American corporations have moved jobs to foreign countries and support the education and importation of highly-skilled technology and professional workers from other countries in efforts to increase the bottom-line. IV. ConclusionEconomic globalization has political, economic, cultural, and ideological dimensions. It is inevitable and will continue toward the development of a singular global market.
According to some theorists, economic globalization is the shortest and best way for developing countries to achieve development, with all of its associated benefits for people. Oversight agencies such as the World Bank, the International Monetary Fund, the Organization for Cooperation and Economic Development are noted by others to be the club of the rich.Their interests and logic are perceived as necessary in the new world order, by some. Others believe that the unchecked power and authority of these agencies to determine the course of economic globalization have created the need for social and economic counter-projects.
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