Globalization Foster Economic Growth Globalization Term Paper

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Aside from these positive consequences, a free market would negatively affects small entrepreneurs in the meaning that most of them would not possess the necessary resources to compete with international producers and would end up in bankruptcy.

Multinational corporations and international organizations

Large international corporations have been widely criticized for the destruction of local businesses and for forcing their own products and culture upon other countries. One of the most eloquent example of such behavior is McDonald's, for the expansion of which specialists used the term McDonaldization "to describe the phenomenon of local cultures being stamped out by multinational corporations spreading a homogeneous Wester (usually American) culture." However, economists' opinions on the matter vary: the advocates of globalization state that the international corporations aid to the development and enlargement of other countries' culture, while disclaimers of globalization believe that the process destroys local small companies and damages the countries' culture.

In order to control such behavior and prevent large multinational corporations to damage other countries' culture, international organizations have been formed. These organizations play a judging role on the international market as they attempt to regulate monopoly and install rules of commerce. For instance, the Committee of Economic and Social Council states that these organizations ought to: "make the process of market liberalization more stringent through audits and inspections; make the inspection and monitoring process compulsory; encourage the implementation of financial incentives such as tax reductions or low interest loans by member states and international financial institutions; implement awareness programs to educate members upon the long-term benefits: general education, fair wages, good working conditions, sharing of basic technology and health care."

The problems of multinational corporations

One of the most severe issues regarding multinational companies and globalization refers to the processes of outsourcing and offshoring. These two terms are rather similar and imply that local producers chose to employ foreign contractors instead of national workers. By deciding to employ human resource from abroad, the producer directly contributes to an increase in the unemployment rate in his country and indirectly to economic decrease.

Among the most relevant reasons behind outsourcing are lower costs and better quality of the products and services. However, the impacts upon the outsourcer's country's are quite dramatic. In order to solve this situation, the international organizations should promote world wide, no boundaries, job opportunities. This way, all people would be able to work anywhere in the world without any political restrictions. But this could only be done if the renumeration systems would correspond in all, or at least the great majority of countries. Nowadays, such a situation seems like a utopia and the path towards achieving it is complex and unyielding, necessitating a large amount of time.


In a nutshell, the term globalization stands for international liberalization of all elements that define humanity from education or fashion to economy and politics. Internationalizing these elements has both negative as well as positive effects upon world countries.

The most relevant negative effect of globalization is the increased rate of unemployment due to outsourcing of jobs. This problem could be solved in the years to come by a complete liberalization on all markets, from product markets to workforce markets. However, today such a solution seems impossible and it will take several decades to implement.


Horowitz, M.C., 2005, New Dictionary of the History of Ideas, Volume 2, Communication of Ideas to Futurology, Thomas Gale Publishing

Wikipedia, the Free Encyclopedia, 2006, Globalization, article was last modified on October 25, 2006,, last accessed on October 25, 2006

Sweden, 2005, the Role of Multinational Corporations in Achieving the Millennium Development Goals, the Committee of Economic and Social Council

Horowitz, M.C., 2005, New Dictionary of the History of Ideas, Volume 2, Communication of Ideas to Futurology, p. 389, Thomas Gale Publishing

Wikipedia, the Free Encyclopedia, 2006, Globalization

Horowitz, M.C., 2005, New Dictionary of the History of Ideas, Volume 2, Communication of Ideas to Futurology, p. 423, Thomas Gale Publishing

Horowitz, M.C., 2005, New Dictionary of the History of Ideas, Volume 2, Communication of Ideas to Futurology, p. 465, Thomas Gale Publishing

Sweden, 2005, the Role of Multinational Corporations in…[continue]

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