"Why they are wrong". Analyzing globalization and its impact on the rich and poor

Essay, 2017

8 Pages, Grade: 71


Why they are wrong – Anti-globalists

Globalisation is a highly opinionated topic, which is discussed throughout the years (Boddy 2014), especially since Donald Trump won the election in 2016 who is now promoting a way of business which is considered to be more in the direction of protectionism rather than globalisation (Berenson 2016). Protectionism is supposed to protect producers, workers and businesses of the import-competing sector from other countries. Political tools to achieve such a protection of national business are tariffs, regulations on imported goods and other government regulations (Milner 1989). This is against what the world has been moving towards in the past decades since WWII. Western society since then has promoted a more global approach of living, including migration, trade and problem solving (Bardham 2017).

Globalisation is described as the process of increasing the integration of internationally dispersed goods (Boddy 2014, Banerjee et al. 2009). These integrations include factors such as culture, society and economical, political and informational co-operation (Linsted 2009). All those factors contribute to the fact that the world is moving closer together rather than further away, how Donald Trump is suggesting. The world is becoming a “global village” (Linsted 2009, p.341) with products available in countries that do normally not have access to them, such as bananas in the UK or a Mercedes in the United States.

Critics of globalisation suggest that globalisation as it is today only benefits the rich and leaves out the poor and defenceless (BBC 2017). To assess the extent to which this argument is true this essay will discuss the topic of globalisation with a view on the article published by The Economist in October 2016 “Why they´re wrong” (The Economist 2016, p.13). It will start with definitions of rich and poor and when someone is considered rich or poor and when a country is considered rich or poor. This is because everyone has an opinion about what is means to be rich, but these vary a great deal throughout society. Further it will assess negative impacts on the poor and how they are hurt by the process of globalisation and positive impacts on the richest countries and people and the ways they benefit from a more globalised world. To finish the essay off, it will consider how being part of the “global village” positively impacts the poor and why globalisation is a good process for all.

Over the years there is a vast variety of definitions and descriptions about at what point a person is rich or poor. To be able to argue precisely this essay will go with Kaplinski´s (2005) definition in which he takes the World banks PPP $ in consideration. He describes someone poor with the inability to sustain appropriate shelter and the ability to access food over a long period of time. The UN (2017) and Kaplinski (2017) stipulate on the fact that a person living under 2 PPP$ per day is considered poor. The PPP stands for Purchasing Power Parity and is translates the currency in to US$ to be able to compare countries´ inhabitants purchasing power. Other comparisons were the Mars-Index or the McDonalds Index where items on were compared and it was looked at how much could be purchased with the same amount of money. If the essay refers to poor people in the following it will refer back to the 2 PPP$ line, under which they live.

While the UN and the World Bank agree on a clear line of people being poor there is no internationally valid level of when someone is rich. Therefore if the essay mentions rich people it will refer to people on the highest level of taxation in the United States, which kicks in at a yearly income of 415,051 US$ (bankrate 2017). The reason the United States are chosen as a comparison in this segment, is due to the fact that the article in the centre of this discussion uses the US frequently as an example and it is considered the leader of the Western world (The Economist 2016).

Following the definitions of people is the definition on when a country is considered poor or developing. Therefore a combination of the World Bank´s (2017) and the UN´s (2017) definitions will be used to be able to describe the differences between rich and poor countries. The World Bank has converted the local currency for each country and put them into a list that splits developed (rich), transition (medium) and developing (poor) countries in a way that can be applied globally. Following the World Bank´s and UN´s listings countries that are developed at the current moment qualify when they have a GNI (Gross National Income) of 12,615$ per capita or above, which means that every national´s income is bringing money in to the country is considered no matter where the income is generated. Poor (developing) countries on the other hand are considered to be that, when their GNI is below 1,035$ GNI per capita (World Bank 2017, UN 2017). The poorest countries in the world are clustered in Africa, Asia and Africa and are the ones that are considered developing or just reached the bottom end of the transition phase and this is what the essay will refer to as poor countries (Bardham 2017, Hill and Hernandez-Requejo 2011).

In the following the essay will discuss negative impacts globalization has on the poor people of the poor countries and on the poor or unskilled workers in the developed countries. Donald Trump argues that due to globalisation American workers are losing their jobs and unemployment rates are rising (Wilts 2017). He is blaming most of that on the Chinese and other Asian countries with low labour costs. While most of his accusations are wrong, he is right with the fact that low skilled work is often outsourced into countries where labour cost and employment law are not as developed as they are in the US or other Western countries (Kang´ethe 2014). This is due to the massive difference in cost for corporations in manufacturing and other companies focusing on producing goods with a large low skilled workforce. This is in fact hurting the poor and helping the rich, as suggested by critics, in a way that it takes away income in America, raises unemployment levels and generates more profit for already massive corporations, such as NIKE or Apple who outsource most of their production to Asia (Apple 2017, Nike 2017).


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"Why they are wrong". Analyzing globalization and its impact on the rich and poor
Queen Margaret University
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ISBN (eBook)
ISBN (Book)
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458 KB
Business, Management, Globalisation, The Economist, Why are they wrong, Critical Analysis, Critical Issues, Critics
Quote paper
Marcel Strangmueller (Author), 2017, "Why they are wrong". Analyzing globalization and its impact on the rich and poor, Munich, GRIN Verlag, https://www.grin.com/document/417202


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