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What are the advantages and disadvantages of globalization?
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Globalization creates a race to the bottom

Globalization increases international competition which creates a race to the bottom.
Economics Globalisation Politics

The Argument

The “race to the bottom” hypothesis basically states that if the global market opens to all countries, even the low-wage and developing ones, then the competition will force those nations to relax key environmental, economic, and tax regulations at the cost of social values in order to attract investment.[1] Major economists like David Autor and Mariya Mileva have directed global attention to this growing threat, which becomes more ominous as low-wage countries enter into the global fold.[2] The “race to the bottom” is incredibly pertinent in today’s changing world and the need to focus on wage equality and the environment over the false tenets of “free trade” within a global market is more essential than ever before. The international standards for financial regulation should not be restricted by a globalized market that has no regard for common social value and accountability among its constituent nations.

Counter arguments

Globalization does not automatically entail a global, unregulated “free market.” The precepts of globalization do not always coincide with those of an open economic system that ranks some countries above others. It could be within the context of social value, trade under particular nations’ regulatory practices, or several other inter-relational scenarios not outlined within the argument here. Additionally, a global free market does not necessarily mean a “race to the bottom” in social values - it depends on what a particular country views as most important to its citizens. It could keep regulatory practices in place while engaging in free trade on a global scale. The concept that globalization will inevitably lead to a race to the bottom is illogical.

Proponents

Premises

[P1] A “race to the bottom” results from an unregulated open market that encourages low-wage countries to value increased investment over social values. [P2] Globalization encourages an economic system that causes low-wage countries to rely more heavily upon investment than environmental and tax regulation, resulting in a “race to the bottom.” [P3] Therefore, globalization is detrimental to the world, socially and economically.

Rejecting the premises

[Rejecting P1] “Race to the bottom” is a phrase that indicates economic disadvantage, but an open market does not necessarily incentivize countries to lower their regulatory standards. All countries possess different frameworks for their economic and social operations. [Rejecting P2] Globalization is not automatically tied to a race to the bottom because it is not always associated with a global open market. Additionally economic investment might be more important to developing nations, while environmental and social regulation should be emphasized by more developed nations. An open global market does not always lead to economic turmoil. [Rejecting P3] Globalization is not always bad based on the aforementioned arguments.

References

  1. https://www.thebrokeronline.eu/the-race-to-the-bottom-explained-d55/
  2. http://economics.mit.edu/files/6613
This page was last edited on Tuesday, 3 Nov 2020 at 15:59 UTC

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