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Globalization controversy

Discuss the economic and political economy aspects of the globalization debate. Why has globalization created so much controversy?

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Globalization is the increasing integration of economies around the world, particularly through trade and financial flows. According to the International Monetary Fund, globalization is "the growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology." (IMF World Economic Outlook 1997). This process affects virtually every aspect of our lives, and therefore garners a great deal of attention.

International trade has long been accepted as the means by which economic growth can be maximized. Through specialization and economies of scale, nations can achieve together a higher standard of living than they can separately. Comparative advantage dictates that all nations are better off when they specialize, as long as there are any differences between their capabilities. It seems odd then that so many would oppose globalization so ardently. However, these detractors believe that the benefits of globalization are not distributed fairly. This creates political instability, as desperate nations are more likely to declare war on their neighbors. As huge corporations reap the profits of using cheap labor in developing countries, they become extremely powerful. Some argue that ...