8.9 Flashcards
What is globalisation?
The greater integration between economies in terms of trade, investment, immigration, and information sharing.
What are the benefits of globalisation?
It’s a driving force for economic growth
Free trade with other countries creates new markets
Selling more products increases company profits -> hire more workers
Results in both companies and workers become wealthier -> standard of living improves.
Enables nations to specialise in the products that they make efficiently or grow naturally
Increases focus on efficiency and cost savings by producers.
What is the downside of globalisation?
Can create unfair working conditions for many workers in poor countries
Large TNCs, for example, may shift their production factories to poorer countries where they can hire labour more cheaply
- These workers may be forced to work long hours in unsafe and unhealthy factory environments for a very small wage
- Workers in the home country of the TNC may lose their jobs altogether.
TNCs may also choose to locate in countries where environmental regulation is less stringent resulting in exploitation of natural resources and damage to the natural environment
The profits of TNCs often provide little or no benefits flowing on to local communities.
