Is Economic Globalization A Positive Trend?

Taking Sides Issue 1: Is Economic Globalization a Positive Trend?

International Monetary Fund Staff and Nancy Birdsall

In this issue, the International Monetary Fund Staff and Nacy Birdsall explain and debate the impact of globalization on the world economy. Globalization essentially means that the world is interacting more. From an economic standpoint, it means that global trade and international investment have grown exponentially while tariffs have decreased. Free trade is encouraged, particularly by the US, in the hopes of maximizing profits for all countries involved. The US even helped to found the IMF. Their article, “Globalization: A Brief Overview” argues the position for economic globalization. In the IMF’s research, they find that

According to the author, inequality on a global scale is high and still growing. Birdsall does concede that in some countries inequality hasn’t actually change and in a few countries it has actually declined. Her point is simply that globalization increases the likelihood of higher inequality rates. Birdsall outlines three ways that globalization does this. First, countries with more and better productive assets will do better in the global economy. Productive assets include having a secure government as well as physical assets. This means certain countries will already be at an advantage compared to others. Second, Birdsall believes that the global markets are imperfect and lead to some failures. She writes, “The classic example of a market failure is that of pollution, where the polluter captures the benefits of polluting without paying the full costs” (21). Third, Birdsall contends that globalization just helps to make the rich even richer. Birdsall concludes of globalization: “Though not the root cause of global inequality, it does tend to exacerbate inequality all other things being the same” (24). She believes that for globalization to reach its potential as a helpful rather than harmful tool, global polity needs some major