Globalization

							          How Globalization Can Change The World




          How Globalization Can Change The World




       In the book, In Defense of Globalization, Jagdish Bhagwati attempts to prove that

globalization is a positive thing that can have many benefits for the world. In this essay, I

will discuss certain topics found within the book and show the possible effects of

globalization. In this way we can see if globalization is a beneficial thing that is worth

implementing into society or is it something that should be completely avoided. Some

important questions that I found in the book is how globalization will affect world

poverty, child labor and wages and labor standards. I will then evaluate whether

globalization is a positive or negative thing.

       Bhagwati points out the critics’ arguments and tries to show that they are merely

exaggerated claims and are based on misguided information. Bhagwati believes that
many people tend to look at globalization as if it is a “homogeneous, undifferentiated

phenomenon” (Bhagwati 2007:7). Bhagwati believes that globalization has many

different aspects to it. In this book, he focuses on the economic aspect of globalization

and how it affects the world. Even still the economic facet of globalization still has many

other aspects to it. Globalization is a very broad topic. Bhagwati is trying to prove that

people have a distorted view of what globalization is and it affects their judgments about

the positive attributes globalization can have on the world.

       A major question about globalization is how it will affect poverty on a global

scale. Bhagwati attempts to prove that globalization can help global poverty by allowing

freer trade. Bhagwati’s argument is supported by Sir Dennis Robertson, a famous

Cambridge economist, who says that trade is “an engine of growth” (Bhagwati 2007:53).

This coincides with the argument that trade stimulates growth and growth in turn reduces

poverty. Bhagwati then goes on to say that certain types of growth can have more of an

affect on the poor than others. Therfore, he believes that in order for globalization to

have a positive impact on the poor the government must put in place policies that will

allow those in poverty to reap the benefits of globalization. One problem is that during a

growth period the poor don’t have access certain opportunities so that they may also grow

and make themselves better off. Bhagwati states that things must be done to give access

to the opportunities that are created when there is growth in the economy for the poor.

You can see the benefits of freer trade on poverty if you look at China and India. China

and India have the largest cluster of poverty. Both countries have become freer in trade

and commerce. According to the Asian Development Bank poverty fell from 28 percent

in 1978 to 9 percent in 1998 in China. Officials in India reported a 51 percent drop in
1977 to 26 percent in 2000 (Bhagwati 2007: 65). This adds credence to the argument that

globalization will allow freer trade which will enhance growth which will reduce poverty.

Hence, globalization will reduce world poverty.

       Child labor is another important issue in the world that needs to be addressed.

The International Labor Organization (IL0), responsible for overlooking the world’s

labor issues, estimates that 100 million to 200 million children under fifteen are working.

Of those numbers 95 percent are from poverty stricken countries. It is estimated that 100

million are those children do not attend school (Bhagwati 2007: 68). Many people that

are anti-globalization blame child labor on globalization. Bhagwati does not believe this

holds true because he believes that globalization reduces poverty. He believes that if

anything globalization will reduce child labor and increase children enrollment into

school. Bhagwati believes that the increase in schooling for the children will boost the

literacy rate. Bhagwati stated that many people “will chose to feed their children instead

of schooling them if forced to make a choice. When income improves, poor parents

generally respond by putting children back into school (Bhagwati 2007:69). According

to data found in Bhagwati study of East Asia, an increase in literacy allows for rapid

growth. Therefore,

       Another important issue surrounding globalization is its’ affect on wages and

labor standards. Bhagwati points out that many people who are against globalization feel

that it will cause wages to fall for their workers as well as lower labor standards. Many

labor unions think that rich countries will be damaged by trading with poor countries

because workers and unions fear that workers will leave to work in situations where

standards are lower. (Bhagwati 2007:127). Bhagwati does not believe that globalization
will hurt workers in fact he believes that globalization will benefit workers. He points

out that many of the anti-globalization claims are not supported by much evidence.

Bhagwati states that data have suggested that people do not go to work in places where

labor rights are ignored or not highly enforced (Bhagwati 2007: 130).

          I personally feel that globalization is something that can be a positive thing if it is

controlled and used in ways that can benefit society as a whole. I think that Bhagwati

somewhat believes that globalization is a solution to many problems that the world faces.

As I read this book I felt as if Bhagwati felt that this was the only way to solve these

problems. I don’t endorse globalization a hundred percent but I did gain some insight as

to some of the positive affects that it can have on the world. Globalization is can a useful

tool in fighting and solving certain problems in the world such as global poverty, child

labor and labor standards and wages but it is not the say all method to solving these

issues.
Fall 2008
Eco 1326 Economic History (MWF 1:25-2:20)
Professor Hee-Young Shin
October 10, 2008




        How Globalization Can Change The World




                               Table of Contents

                          1. Introduction
                          2. Globalization affects
                                 a. Poverty
                                 b. Child Labor
                                 c. Wages and Labor Standards
                          3. Conclusion




                                                                      Ryan Maher
                                           Department of Economics and Finance
                                    Tobin College of Business, St John's University
                                     Reference:

Bhagwati, Jagdish. 2007. In Defense of Globalization. Oxford and New York: Oxford
University Press.