22 Globalization Pros and Cons

Our world is becoming a much smaller place. We can quickly communicate with people who are on the other side of the planet. A person with a computer and a good idea can create an e-commerce platform which reaches the entire world. In many ways, we are closer to each other than ever before.

Yet despite this closeness, we are still divided in the broad brush of humanity. There are 200+ countries on our planet with borders that are enforced in some way. People cannot travel freely across borders without some form of identification or consequence if caught not following laws and standards. Globalization asks this question: what would happen if all those borders went away? Here are the globalization pros and cons to think about when looking at a borderless planet.

What Are the Pros of Globalization?

1. It encourages free trade.
Without borders in place, consumers can purchase items from anywhere in the world at a reduced cost. There would be fewer barriers in place, like tariffs, sales taxes, or subsidies because there wouldn’t be nations in place that could add restrictions. From 2008-2015, the Washington Post reported that the G20 nations placed more than 1,200 different restrictions on imports and exports. That goes away with true globalization, which means free trade will be encouraged.

2. More trade means the potential for more jobs.
When there are fewer barriers in place to purchase items, then consumers will generally purchase more things. This creates the foundation that businesses need to create more jobs. Globalization with free trade increases competition as well, which means innovation must be part of the equation. Consumers benefit from that innovation with lower pricing, which means more products can be purchased, and that can stimulate further growth.

3. It eliminates currency manipulation.
Many countries today manipulate their currencies to benefit their local economy. Even the three “primary” currencies of the world do this: the pound, the euro, and the dollar. Donald Trump announced in 2017 that the dollar was becoming “too strong,” which is a statement that was meant to potentially weaken the dollar. With globalization, countries no longer have a need to manipulate their currencies to obtain price advantages, so it is the consumer who can benefit from the outcome.

4. Open borders mean more opportunities to develop poor areas of the world.
There are many nations in the world today that are in a state of entry-level industrialization. Poverty is a feature in many of these developing countries. Through the process of globalization, the removal of borders allows the people in these areas to experience greater prosperity because each area gains the ability to access what they need. There are fewer opportunities to suppress people at the expense of others so only a few can benefit from success.

5. Business tax havens go away in globalization.
Numerous organizations over the years have been accused of placing their money in countries that have generous tax laws. These countries, which are often referred to as “tax havens,” allow the business to not pay as much in taxes. It is a process which awards the executive team with high salaries and bonuses, but leaves the common worker behind and limits the funds a government receive for operational purposes. Through the process of globalization, the tax havens go away because the borders go away.

6. It allows for open lines of communication.
When borders are removed, people have the ability to communicate with one another more freely. There is a greater intermingling of cultures, which allows people to have a greater perspective about the world. When we have access to more information, we have an ability to make better decisions. Instead of people from a different country being considered an alien, we would all be considered human. It becomes a place that is more open and tolerant.

7. It could stop the issue of labor exploitation.
One of the ways that goods are produced cheaply in the world today is because of labor exploitation. This can be seen with child labor, prisoner labor, and human trafficking. Workers are further exploited through the implementation of unsafe working conditions because they may have entered a country illegally and face jail time or worse if they report on their conditions. By opening borders, it becomes possible to open business activities, thereby removing the need of a black market for cheap goods or services.

8. It limits the potential for abuse because there are fewer structures in place.
In our current bordered structure, there are 200+ different administrations that can potentially abuse their people. The levels of accountability that can be in place to stop these abuses are usually implemented at the leisure of those who are in charge. That is how dictators can come into power and then stay in power. Globalization limits those structures and introduces a global system of accountability, creating a safety net which could potentially stop violent conflicts before they start.

9. We could begin pooling resources to do great things.
Multiple countries are running space programs right now. Some private businesses are doing the same thing. If they could pool their resources and combine talents to work toward one single goal instead of having multiple agencies all trying to do the same thing, we could be more efficient with our innovation in the area of space exploration. The same principle could be applied to virtually any industry or idea.


What Are the Cons of Globalization?

1. It generally makes the rich become rich and the poor to become mired in poverty.
Globalization is supposed to be about free trade, but the reality of the situation is that only true globalization which removes national borders can do this. Under our current planetary structure, there are value-added taxes that can exceed 20% for some countries, which limits the access that people have to imported products. This means the rich can access what they want or need to become richer, but the poor get trapped in poverty because they don’t have the means to access success.

2. Jobs get transferred to lower-cost areas.
Jobs can be created through globalism, but they tend to be created in the areas where labor costs are the cheapest. Even in a world that is completely without borders, the cost of doing business is going to be cheaper in some areas than in others. Businesses will transfer or create jobs in these low-cost areas so they can remain competitive. Instead of it becoming a race to the top, many people in a borderless world could experience a race to the bottom instead.

3. Globalism creates a culture of fear.
Even in jobs aren’t exported to cheaper areas of the planet, business owners can hold the threat of doing so over the heads of their current workers to gain salary concessions. It creates an environment where workers, especially those who would be in the current Middle Class around the world, would be unable to have any leverage when it came to their take-home pay or working conditions. People would be forced to either freelance their skills, create their own business, or accept the race to the bottom of the pay scale to keep their employment.

4. It creates a political system where the biggest and the richest have influence.
In many developed countries today, there are large companies, lobbyists, and wealthy individuals who are highly involved in politics so that they can have a favorable set of regulations and laws. If national borders were to disappear, this issue would become a global problem. The largest businesses and wealthiest people could hoard global resources for themselves through whatever government was put into place, enhancing the social inequalities that are already being seen on smaller scales.

5. Richer regions will always consume more resources.
It’s not just the largest corporations and wealthiest people who benefit from globalization. Regions that are wealthy will also consume more resources under the guise that they produce more for the rest of the world. This is already happening today. According to information from the United Nations Development Program, the G20 nations consume 86% of the world’s resources. In comparison, the poorest 80% of the world consume the other 14%.

6. Diseases travel faster in a world that is globalized.
When people stay within their own regions, there are fewer problems with communicable diseases. The open access that we have today already increases the threat of a new disease being spread to all corners of the planet in less than 14 days. If there were no borders and people could travel freely to wherever they wished to go, this issue would cause even the most remote parts of the planet to be exposed to potentially deadly health concerns.

7. Social programs that act as safety nets could be removed.
Many countries today offer their poorest of the poor a safety net for survival. This includes food stamps, housing provisions, and other benefits that may go away in a world that has fully globalized. A single country can typically care for its own with a system of taxation, social benefits, and healthcare. Extend that to the world and the sheer poverty that so many people face would make it nearly impossible to have a meaningful safety net in place.

8. Cheating could become a lot easier to do.
We’re already experiencing a leadership gap in the world today when it comes to the distribution of resources. According to Oxfam, the world already produces 17% more food than the current human population requires for a meaningful standard of life, yet even in the United States, 20% of children live in households that experience food insecurity. Globally, tens of thousands of children die of hunger annually. If we already have the resources to fix it, then cheating and corruption is preventing us from doing it. Eliminating borders will only make it easier to do this because it would create less, not more, oversight.

9. It could lead to greater worker exploitation.
If there is a race to the bottom for worker wages globally, then there would be nothing to stop organizations from exploiting workers so that goods could be created cheaply. Households in such a scenario would be earning less, so they’d be demanding lower prices. That could mean a change in global laws that could create more prison-based labor, changes to child labor laws, or changes in worker safety standards to meet the potential demands.

10. It won’t be a level playing field for everyone when it happens.
A world of open borders might seem like a great idea because of all the globalization benefits that are possible, but we must look at how the creation of a borderless planet would come about. The countries of the world which currently have the most input on global affairs would be the loudest voices at the negotiation table. The smallest countries that exist today would likely struggle to even get a seat at that table. This means going borderless would create an uneven playing field that might eliminate nations, but would still create pockets of people who are more privileged than others. People are not generally going to give up what they must raise the boats of others to an equal playing field without receiving some benefit.

11. It could have a negative impact on the environment.
This globalization negative can be seen in two different scenarios. Let’s say that production levels increase because everyone sees a boost in their economic circumstances. This would potentially increase pollution levels that could acidify the air, the ocean, and cause more issues with global warming. Or we could say that fewer people are buying things because their economic circumstances have worsened due to lower job salaries. This would create more waste and rot in the world which could also acidify the air and ocean, leading to more issue with global warming.

12. Losing borders could mean losing an identity.
We often identify ourselves from our nationality, ethnicity, and family background. In a world that goes borderless, that nationality would merge into a person’s ethnicity. Larger countries are already experiencing this issue to a certain extent. You might have been born in Iowa, but most people would call themselves an American before calling themselves an Iowan. On a planetary scale, this would mean large swaths of culture would lose their identity and a loss of that culture would be a great loss for humanity.

13. There’s a reason why we say that “absolute power corrupts absolutely.”
This familiar phrase is attributed to Lord Acton, who was a 19th century politician who admittedly took the phrase from writers who had expressed a similar thought. When only one person holds all the power over a governing body, then it corrupts them. There are numerous examples of this. Roman emperors even declared themselves to be gods. Imagine what having one person in control of the entire planet and its unlimited power would be like using our examples from history, especially if that person had some talent or skill that made them seem almost supernatural.

The globalization pros and cons show that there would be many benefits to a borderless world, but there would also be great challenges which would need to be solved for it to be a workable solution. Whether one supports a world without borders or supports the current state of affairs, one truth can be found: we have a responsibility to help each other. When a minority of the world consumes a vast majority of its resources, that is evidence which shows we must heed the call to help people in need.


Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.