Essay about Costs and Benefits of Globalization and Localization

1312 Words 6 Pages
The debate over globalization and localization has long been fought as whether or not to pursue an international or isolationist foreign policy. Essentially, the term globalization means an integrationist approach to policy, whereas localization refers to a fragmentational approach to foreign policy. There are many issues in this debate, but none as complex and important as that of the costs and benefits of the economy. Other issues consequential to the topic are the political and social implications to these policies.

Economics runs all countries, whether or not they have a global or local approach to policy. Globalization, like all things, has both costs and benefits. Economically, the downfalls to globalization include the
…show more content…
One such benefit is the "expansion of production, trade, and investments" (Rosenau 17). This expansion can also travel across national boundaries extremely fast (16). In addition, "both sides of the great income divide stand to benefit from globalization: the developed countries by reaching a larger market for new innovation, and the developing economies by enjoying the fruits of those innovations while sharing in global production via multinational enterprises"(Sachs 101). The industry will also benefit from the opening of countries with cheap low-skill labor while not taking away jobs from countries such as the United States that does not have an industry of low-skill jobs (107). The emergence of low cost labor in the openness of globalization allows for the increase of higher skill jobs in developed states and the introduction of industry in lesser developed states, while bringing the cost to the consumer down for the product. The global economy creates a free market where most businesses and industries can flourish.

The other form of foreign policy, localization, has its own costs and benefits to the populations of the world. In localization the dealings of producers and consumers are constricted (Rosenau 17). Localized economies choose to create high tariffs in an attempt to protect domestic industry. Other countries retaliate and make trade for resources and products not available in the localized country difficult through their own
Open Document