Anti-Globalization and Its Effects on the Global Economy

Introduction

One of the most divisive and philosophically charged areas of debate globally today is the value of globalization and its effects on the nations that participate in it. On the one hand, much is said about the positive aspects of globalization, including its ability to lift entire nations out of poverty and across the $10,000 per capita income threshold that marks the beginning of many nations' ascent to prosperity (Drache & Froese, 2006). Proponents argue that the economic benefits and quality-of-life improvements validate and rationalize the financial, ethical, and moral costs of globally coordinated development strategies (Drache & Froese, 2006). Detractors see a far different dynamic — one based on the economic balkanization of the world and a form of economic dependency enveloping nations too poor or politically weak to support themselves (Brooks, 2004).

Anti-globalization advocates also argue that it is the ethical and moral responsibility of multinational corporations (MNCs) and wealthier nations to create a more egalitarian approach to managing globalization — one that ensures effective Corporate Social Responsibility (CSR) guidelines and programs are followed (Gjølberg, 2009). At the center of this wide philosophical divergence is the reality that many of the economic treaties and initiatives put in place to stabilize global economies ignore the effects on citizens and workers. Agreements like Bretton Woods also set in motion Keynesian economic policy that persists to this day. This divergence in philosophies is growing, and this paper analyzes why.

Anti-Globalization: One Country's Patriot Is Another's Traitor

Global economic policy serves as the foundation for many of today's globalization strategies, trading agreements, and programs between nations. These tariffs, treaties, and initiatives have established the dominant schools of thought regarding economic policy and the role of globally based Foreign Direct Investment (FDI). Advocates of globalization argue that this approach to defining global economic systems has acted as a growth catalyst responsible for the most rapid economic expansion the modern world has seen in recent centuries (Hynes & Cerna, 2010). Supporters also argue that open globalization can accelerate entire industries, making them more competitive, more market-focused, and more responsive to customers' needs.

While the many trade agreements have certainly contributed to this level of free-market dynamics and growth, they have also left entire nations at the bottom rungs of the economic ladder with little opportunity to improve their per capita incomes or enjoy the benefits of growth. Advocates argue that only through exceptional effort, personal productivity, and process-level innovation can a nation rise on the economic ladder, claim membership among countries with per capita incomes over $10,000 per year, and eventually join the OECD. This is the aspiration of leaders in developing nations and the reason many tolerate the costs of globalization. They are betting on future growth, yet in the meantime their workforces sometimes pay a high price for participation in global economic value chains without always receiving a fair share of the economic value generated.

Anti-globalization advocates argue that this form of selective globalization is actually prejudicial and harms more than it helps the participating countries (Hynes & Cerna, 2010). They further contend that greater economic uncertainty leads to higher unemployment and greater reliance on external income sources in developing nations whose economies may be stagnant or contracting. The more severe the economic downturn — as measured by unemployment and negative growth — the greater the resentment toward MNCs that use a developing nation's workforce as a low-cost production or service partner (Hynes & Cerna, 2010). As global economic pressures continue, these nations' weak points in terms of economic, social, and political systems are increasingly exposed. The catalyst for anti-globalization sentiment can be traced directly to this dynamic: workers in developing nations laboring harder than ever within globalized MNC supply chains yet seeing little, if any, improvement in their quality of life — and in many cases experiencing a deterioration (Drache & Froese, 2006).

Conclusion

Anti-globalization advocates argue that the prevailing approach to building business value chains and relationships reduces economic growth to transactions in which developing nations often receive little if any value for their efforts. Compounding this problem is the fact that transactions dominate while relationships are undervalued and trust is undermined. What is needed is a hybrid model of globalization that draws on the best aspects of knowledge-sharing networks — as exemplified by the TPS model — and in which relationships and knowledge become more central than any single transaction. Such an approach offers a more equitable path forward, one that acknowledges the legitimate concerns of anti-globalization critics while preserving the growth potential that open markets can provide.