Is Globalization Inherently Unfair?

The globalization debate is in many ways unwarranted. This current wave of globalization will continue to proliferate at a rapid rate despite objections from the anti-globalization NGO's and protestors. The fall of communism in all but a few small countries and China (which itself is rapidly capitalizing) has opened markets for modernization and capitalization, in most cases providing a much needed and long absent boost to their economies. Nevertheless, the question of the "fairness" of globalization continues to be raised by the anti-globalization crowd. Many claim that this current trend comes at the expense of developing nations, with international organizations like the WTO, IMF, and World Bank colluding to exploit these countries in favor of richer, more developed states (i.e. the United States). However, globalization is, in fact, inherently fair, in that it rewards transparency, anti-corruption, and sound government economic policies.

The benefits of globalization are well-noted. The rapid and relatively inexpensive movement of information and technology around the globe has worked to level the playing field. A doctor in India can download the latest American medical journal on his laptop computer and apply this knowledge that same day. A bushman in Africa can receive weather updates on his cell phone. This democratization of technology and information has created possibilities that were unheard of 20 years before, and has erased many of the boundaries that created the inequalities of the era prior to this epoch of globalization.

Globalization provides economic incentives for governments to liberalize. Regimes which apply Thomas Friedman's "Golden Straitjacket" (as outlined in his book, The Lexus and the Olive Tree)¹ of transparency and sound economic policies find that the markets respond in kind. Foreign investment is more likely to find its way into a nation with an open and viable economic system. Thus corruption, closed economies, and an illiberal government are punished by the market while liberal governments receptive to their people and effective economic policies are compensated.

Additionally, globalization works to modernize and open economies. Since the economic reforms of Deng Xiaoping, in which he opened China's economy to modernization and foreign investment, China's economy has become among the fastest growing in the world. Despite the closed political environment that remains in China, their newly transparent economy is now subject to accountability, providing the impetus for rapid improvements and an increasingly growing private sector. Prior to Deng's ascension, China under Mao Zedong walled itself in from the outside world, and its closed economy suffered immensely.

The downside to globalization pertains to its capitalistic roots. In any market economy, there are winners and losers. This is no different when the market is applied globally. Examples of recent globalization "losers," however, only proves the fairness and benefits of globalization. The Asian financial crisis of 1997, born in Thailand and spread quickly to South and North Korea, Japan, Hong Kong, and many others, was a direct result of imprudent foreign investment stemming from the lack of transparency in these governments. South Korea, especially, suffered from this malady, and the crisis forced the nation to reform its government and economy. Today, South Korea is one of the strongest of the Asian tigers.

The dependencia economies of Latin and South America were inward-looking economic plans that were centered around import-substitution. This resistance to globalization resulted in high foreign debt and even higher inflation levels, especially in Brazil, thus creating more globalization "losers". These governments reveled in corruption and favoritism, two facets not compatible with the globalization market system, and the system punished them accordingly.

The problem with the winner/loser aspect of globalization is that the real losers are the general populations of the "loser" nations. The poor get poorer, and the rich few usually stay rich through corruption. For globalization to work for everyone, international organizations should play an active role. The International Monetary Fund (IMF) provides for debt relief in conjunction with internal reforms. The World Bank offers programs to alleviate poverty conditions - focusing especially on agricultural programs. The World Trade Organization (WTO), the foremost symbol of globalization, encourages free trade and attempts to open economies by eliminating protective trade barriers. If applied correctly and effectively, each of these organizations can make the transition to globalization smoother and easier by encouraging economic and political reforms while aiding the general populace. The key word in that sentence is "if," because none of these organizations are running perfectly at present, and enforcement is especially a problem for the WTO. However, if these organizations could run their programs effectively, it would do much to further the positive aspects of globalization on a global level.

Globalization as a system is inherently fair. It acts as a police force on corrupt and closed regimes, punishing them through market forces. This new version of globalization has provided nations with the materials to run a successful internationally-based economic system with benefits to the many, not to the few. In order to compete in this new system, regimes that repressed their people economically must reform or confront economic isolation. Effective international organization programs can do much to help this process along. Globalization's democratic and egalitarian aspects can provide a counter to the "unfair" label placed on the movement by protestors.

¹Thomas Friedman, The Lexus and the Olive Tree