1.5: The Globalization Debate Flashcards
What event in 1999 marked the beginning of street demonstrations against globalization?
The street demonstrations against globalization began in 1999 when more than 40,000 protesters blocked the streets of Seattle in an attempt to shut down a World Trade Organization meeting.
What were the main issues protested by the demonstrators in Seattle?
The demonstrators in Seattle were protesting against a wide range of issues, including
job losses in industries facing foreign competition,
downward pressure on the wages of unskilled workers,
lack of market access due to tariffs imposed by developed economies,
environmental degradation,
and the perceived cultural imperialism of global media and multinational enterprises, which were seen as dominated by U.S. interests and values.
What impression did the protests in Seattle leave regarding the World Trade Organization meeting?
Although the protests outside the World Trade Organization meeting in Seattle had little to do with its failure to reach an agreement, the impression held that the demonstrators had derailed the meetings.
How have antiglobalization protests evolved since the Seattle protests of 1999?
Antiglobalization protesters have continued to demonstrate at major meetings of global institutions since the Seattle protests, showing that the movement has persisted and grown.
What challenges do antiglobalization protests pose, and how do they tap into popular sentiments?
Antiglobalization protests, while sometimes associated with violence, tap into popular sentiments in many countries where large sections of the population believe that globalization harms living standards and the environment.
These protests highlight the need for clearer communication to address exaggerated fears and the importance of countering such sentiments in politics and business.
What is the fear associated with Canadian firms outsourcing jobs to developing countries?
The fear is that outsourcing jobs to developing countries will have long-term harmful effects on Canada’s well-being, leading to job losses and potentially lower living standards.
How do critics of globalization argue that outsourcing affects wage rates in developed countries like the United States?
Critics argue that outsourcing leads to downward pressure on wage rates for unskilled workers in developed countries.
They cite examples like U.S. clothing manufacturer Harwood Industries, which closed its U.S. operations and shifted manufacturing to Honduras, where textile workers received significantly lower wages.
What is the response of supporters of globalization to the critics’ claims about outsourcing?
Supporters of globalization argue that the benefits of free trade, such as lower prices for consumers and increased income levels in developing countries, outweigh the costs.
They contend that free trade allows countries to specialize in producing what they can do most efficiently, leading to overall economic growth.
How do supporters of globalization explain the decline in the share of national income received by unskilled labor?
Supporters argue that the decline in the share of national income received by unskilled labor is due to a shift in advanced economies toward jobs that require significant education and skills, driven by technological change.
They suggest that investing in education to reduce the supply of unskilled workers is a solution to the slow real income growth among the unskilled, rather than limiting free trade and globalization.
What evidence is there that the wage gap between developing and developed nations is closing?
The wage gap between developing and developed nations is closing as developing nations experience rapid economic growth. For example, estimates suggest that wages in China will approach Western levels in two decades, indicating a convergence in wage levels between countries.
How do globalization critics argue that free trade can lead to increased pollution and labor exploitation in less developed countries?
Globalization critics argue that firms from advanced nations may move their manufacturing facilities to less developed countries with weaker labor and environmental regulations to reduce their costs and gain a competitive advantage.
They contend that this could result in increased pollution and the exploitation of labor in these countries.
What is the perspective of supporters of free trade and globalization regarding labor and environmental regulations in developing countries?
Supporters argue that economic progress and increased wealth in developing countries often lead to the enactment of tougher labor and environmental regulations.
They believe that free trade can contribute to this progress, leading to higher standards over time.
How do supporters of free trade respond to the criticism that businesses may exploit labor and disregard environmental concerns in pursuit of higher profits?
Supporters of free trade argue that most businesses are ethical and that the relationship between pollution, labor exploitation, and production costs may not be as suggested by critics.
They believe that a well-treated labor force is more productive, and productivity, rather than base wage rates, often has the greatest influence on costs.
They also emphasize the possibility of tying free trade agreements to the implementation of tougher environmental and labor laws in less developed countries.
What evidence supports the idea that rising income levels in countries lead to demands for greater environmental protection and reduced pollution?
Several studies have found consistent evidence of a hump-shaped relationship between income levels and pollution levels.
As an economy grows and income levels rise, initially pollution levels may rise, but past a certain point, rising income levels lead to demands for greater environmental protection, and pollution levels tend to fall.
A seminal study by Grossman and Krueger suggested that the turning point generally occurs before per capita income levels reach $8,000.
How can free trade agreements be linked to the implementation of tougher environmental and labor laws in less developed countries?
Free trade agreements can include side agreements or provisions that commit less developed countries to enforce tougher environmental and labor regulations.
For example, NAFTA (now renamed CUSMA) included side agreements that required Mexico to enforce environmental protection regulations more rigorously.
This linkage aims to ensure that factories based in those countries adhere to higher standards.
