Globalisation benefits consumers
Benefits of globalisation to consumers/individuals
The most obvious benefits here is cheaper prices, globalisation leads to increase competitiveness which leads to price cuts and as a result of this consumers benefits from cheaper prices(Kahn, 1998). Globalisation also gives consumers a more varied selection of products. And it increases the purchasing power of an individual. For example, if I earn 100 euro a month and 50 euro goes towards my groceries I only have 50 euro left to spend but when the likes of Tesco, Lidl and Aldi enter the market I now only have to spend 25 euro to do my shopping and I can easily shop around and compare prices and now I have 75 euro left which means I can now afford to buy more with the same 100 euro than I could before these foreign companies entered the market. However some argue that if foreign competitors enter the market and dominates the market share they may then raise the price or worse move to a cheaper economy to cut cost leaving consumers with little or no choices and higher prices set by domestic companies. However I disagree with this point because if we look at Ireland for example, since the likes of Tesco, Lidl and Aldi entering the market, this has created more jobs and giving us a wide range of products to choose from. Tesco and Aldi are ranked in the top 10 food retailers in the world (Supermarket News, 2011) and I highly doubt that these companies are going to pull out of Ireland as they are well established and are very profitable.
Anti globalisation protesters argue that globalisation is the cause of poverty, just try to tell that to the people of Taiwan. Over 30 years ago these individuals were as poor as many African countries, today they are as wealthy as the Spanish. Since Taiwan began modernising, poverty has cut by half and real wages are ten times higher than they was 40 years ago (Norberg, 2006). From channel 4’s documentary the young Swedish writer Johan Norberg explains how global capitalism does not lead to poverty in fact he goes on to say that before the people of Taiwan were able to escape from the bondage of poverty they needed capitalism at home first. This was done through land reform, if people don’t own their lands then what is the incentive for it to be profitable? (Norberg, 2006). Industrialisation began through the government encouraging people to turn their lands into factories. This lead to the formation of sweatshops, Some argue that multinational companies are exploiting cheap labour , however imagine if consumers refused to buy these goods simply because some a minority felt it was unethical, then Taiwan would not have passed through this transition phase and would still be poor. In addition once industrialisation had developed in Taiwan, the demand for labour rose and wage rates also increased. Acer in Taiwan trained 3000 Taiwanese engineers in, this means that the people benefited through training and education. Today Acer is the 7th larger IT provider in the world and it continues to challenge innovation among Taiwanese people. To summarise the effects/benefits of globalisation for the people of Taiwan: because they were constantly exposed to foreign competition the local companies were forced to be more productive and innovative. They became specialists in the IT sector (Norberg, 2006). They learnt to produce only what they were good at and imported the rest, this is what David Ricardo (the creator of free trade economics) meant when he said:
‘Two men can both make shoes and hats and one is superior to the other in both employments; but in making hats he can only exceed his competitor by 20 percent, and in making shoes he can exceed him by 33 percent. Will it not be in the interest of the superior man to employ himself to make shoes and the inferior man in making hats?’(Ricardo, 1996)
The older generation that worked in the sweatshops were able to put their children through university. Norberg sums this up by saying ‘the older generation made the boxes while the younger ones built what was inside them’ (Norberg, 2006).
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Globalisation is Good. Google videos. Directed by Johan NORBERG. Channel 4. 2006. Available from World Wide Web: http://video.google.com/videoplay?docid=5633239795464137680
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