Globalization's Opponents Should Be Its Biggest Proponents

Globalization is becoming a dirty word among many, and its supporters and practitioners frequently called globalists, a term almost always used derisively, with vaguely anti-Semitic origins.

But globalization, including free trade, more open borders, and the introduction of new technologies to the workplace and the marketplace, is key to human betterment and improvement of the economy’s ability to increase wealth, create high-end jobs, and produce innovative new goods while keeping down prices.

Globalization increases access to capital, reduces costs, allows us to take advantage of all human strengths, and opens markets that facilitate innovation by fattening the customer base.

Globalization makes it easier to raise capital. At one time, those seeking capital to finance new innovations were largely restricted to a limited number of sources. By opening capital markets around the world, entrepreneurs and companies have far more potential investment sources, opening opportunities for the introduction of new technologies, goods and services that make our lives easier and better.

Globalization makes production more efficient and cost-effective. Look at the Apple iPhone. It is frequently cited as a product made in China by a U.S. company. In fact, it is a global product made primarily in the United States. The chip that serves as the phone’s brain, the software, the audio chip and the controller chips are all made in the United States, and/or designed in America by Americans – as are the crucial marketing, apps and customer support.

Other crucial parts are manufactured in Japan, Taiwan, South Korea, and Germany, as well China. Instead of “Made in China”, the iPhone is made all over the world – a production miracle made possible by global supply chains and the cheap transportation and telecommunications that make them feasible.

Globalization facilitates the creation and production of new products. Consider the iPad. Imagine you were in Steve Jobs place at the time the iPad was in its initial stage of development. Product Development tells you it is technologically feasible. You ask Marketing what price point is necessary in order to quickly pay down the sunk costs and start marking a profit. They tell you the iPad would have to sell at $1800, a price the market would simply not be prepared to bear.

But someone at the table points out that with access to a global market, and the expanded opportunity for sales, it could sell at an initial price of $750 and still achieve profitability fairly soon. Bingo, you say, and a new innovative product is launched.

Except that conversation would never take place, because it would never have to. The people sitting around the table would all understand the power of the global marketplace. If anything, they might take it for granted.

Globalization does make a large number of people feel they are dispossessed and denied the opportunity to participate in this wealthier world. But are they really? Education and entrepreneurial opportunities are more readily available than ever. Capital is more accessible. Incentives to upward mobility are enhanced.

Globalization encourages all of the behaviours that make our world a better place – the pursuit of education, a shift to jobs that involve the greater use of  cognitive skills, the creation of new products and services that make our lives easier, better, more rewarding, healthier, and longer. Rather than complain about its impact, globalization should be welcomed – particularly by those most likely to disparage it.