Globalization: Advantages & Disadvantages

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  • 0:04 What Is Globalization?
  • 1:06 Globalization Advantages
  • 2:05 Globalization Disadvantages
  • 3:30 Globalization Debates
  • 4:01 Lesson Summary
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Lesson Transcript
Instructor: Sharon Linde

Sharon has a Masters of Science in Mathematics

Have you heard people talking about globalization and didn't quite know what they meant? This lesson gives a brief definition of globalization and discusses the advantages and disadvantages of this growing worldwide trend.

What Is Globalization?

Have you ever heard that jobs in your area are being outsourced, or read a label on your clothing stating it was made in another country? You may mistakenly think companies making products in another part of the world is something new, but in fact its been going on for thousands of years. Ever hear of globalization? It's essentially the mixing of people, trading of goods, and flowing of labor and ideas that happens on a global scale.

Globalization isn't really a new occurrence, since people have traded with one another on vast scales for a long time. Examples of globalization include the voyage of Columbus in the late 15th century, the library of Alexandria, and the Silk Road to China. However, the pace of globalization has sped up dramatically in recent decades. Since 1950, for example, the amount of global trade has increased by 2000%. But the question really is: Is globalization a good thing or a bad thing? The answer depends a lot on your perspective, so let's look at some advantages and disadvantages.

Globalization Advantages

Globalization has created far more goods for consumers. The promise of worldwide movement of goods and labor makes for increased competition and lower prices. There are more goods available today, from farther flung parts of the world, at lower prices than ever before. The freer flowing trade, reduced labor costs, and fewer trade barriers has led to the rise of giant multinational corporations who are able to take advantage of small price differences and leverage those into huge profits. This has been true for more established industries, such as oil companies and retail giants, but also for other types of industry. In fact, globalization has helped technology companies grow more than any other industry. Can you guess who these companies are?

As of June 2015, the three companies with the greatest worth were Apple, Google, and Microsoft. Former leader Walmart ranked a distant 13th. Globalization has literally created more wealth than the planet has ever seen before.

Globalization Disadvantages

For all the good things globalization has brought to the world, there's defginitely a flip side of the free flow of goods and services. For example, there are fewer barriers to trade, and the rapid pace of globalization means jobs - even whole industries - have been rapidly moving away from the United States. Many textile jobs that were in the US were moved to Mexico. A couple of decades after that, Mexican workers and factories were undercut with prices too, and now those jobs have moved on again to even lower wage countries such as Bangladesh and the Dominican Republic. There is every reason to assume that those jobs will move again in the not too distant future as well.

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