Summary of Crossing Borders: The Globalization Debate
In “Crossing Borders: The Globalization Debate,” the author provides an overview of what globalization is, the benefits of globalization, and the downside of globalization. Globalization refers to a phenomenon of national economic integration signified by the movement of experts, ideas, social customs and trade products across these national borders. Additionally, the conquest of relatively empty and fertile land, international trade, and technological as well as institutional innovations has sustained globalization. Reduced transportation costs as well as developments in ICT have boosted international trade.
The benefits of free trade form the basis of globalization. The competitive advantage accelerated by free trade agreements allows for specialization in different nations, which increases household income, volumes and variety of products from the nations of the world as well as reduces the cost of production especially in nations that lack the resources to produce specific products. For instance, the U.S. would reduce the cost of producing coffee by allowing specialized nations to produce and export this product.
Competitive advantage also allows for improvement of quality such as witnessed in the automobile industry. Globalization’s competitive advantage also boosts labor productivity in high wage economies such as the U.S. and U.K. because they move less skilled labor to low-wage economies consequently increasing demand for the high-skilled labor in the former. Finally, integration exposes the poor economies to new technologies and ideas. Conversely, on the downside, globalization downplays nations that cannot compete with foreign manufacturers, leads to unemployment, and to increasingly high-income inequalities. The author concludes that the policymakers should debate on the advantages and downsides of globalization.
