Local economies lose autonomy due to globalization, and national governments have less say in matters of state interest, including military and defense, economy, communications.
The term globalization is used for sectors and industries that gradually move away from a particular state or territory and the resources it offers. The main reasons for this are public policies, regulations, customer preferences, and level of technological progress which vary by country. The fact that national economies have opened up, coupled with economic liberalization, contributes to further loss of autonomy. Policies toward economic liberalization include privatization, financial deregulation, and fiscal decentralization. But globalization is not only limited to national economies and production processes. It also refers to the ever increasing interactions at the global level, including exchanges of ideas and cultural practices, movement of people and migration, and the political domain. World or global politics is an umbrella term for international nonprofit organizations, intergovernmental organizations, international agreements, and state governments.
Proponents argue that globalization forces help developing countries improve quality of life now that they have access to international markets. This means that they can produce and export products at competitive prices. Free trade and economic liberalization mean fewer barriers to trade such as government subsidies, value added taxes, tariffs, and others. Given that domestic companies are forced to compete with businesses headquartered in other countries, they are quick to improve efficiency and quality and to reduce costs. This means that customers are offered higher quality products and services. Free trade has also resulted in increasing specialization whereby states focus on products that can be produced more efficiently. This is beneficial for states because it means increased levels of output. The opening up of economies also means that companies are quick to implement new technologies, and the result is better quality products and further technological advances. Liberalization is beneficial for consumers in other ways. Now they have access to a host of goods produced around the world.
Critics point out to the fact that globalization results in the erosion of boundaries, loss of autonomy in decision making, and the decline of the nation-state. Furthermore, while developing countries benefit from having access to global markets, developed countries lose jobs to countries with a cheap labor force. Companies that operate in developed countries may either move to low-labor countries or cut pay for domestic workers. Critics also argue that multinational companies contribute to the mismanagement and depletion of natural resources and offer inadequate working conditions and low wages. In some developing countries, companies use child labor to lower production costs. They often work in inadequate and inhumane conditions, and health and work safety is not a priority. What is more, while multinational companies previously focused mostly on production and commerce, today they are increasingly entering the political domain and influencing decision making. Wealthy individuals and large corporations have a say in politics and lobby for favorable policies and regulations.
Critics also highlight the fact that globalization has led to a huge income gap, and the poor are doomed to a cycle of poverty while the rich have become super rich. In a world in which most countries have implemented value added taxes, the rich have the means to access production equipment and resources which the poor cannot afford to buy.
And while supporters argue that globalization results in further technological advances, critics point out that technologies that have been developed in industrialized countries can be easily stolen or copied by companies in developing countries.
Diseases also spread across borders because of migration flows, movement of people, and travel for leisure and business. With open borders, there is a higher risk that a disease will spreads around the world. Today people have the unique chance to travel freely and increasingly do so. They get exposed to viruses and bacteria that their immune systems have not been exposed to. Travel-related diseases have become more common as well, including diseases such as hepatitis, malaria, and sexually transmitted diseases.
Finally, critics warn that globalization will lead to loss of identity. People identify themselves with their family, community, ethnical origins, nationality, and state. Loss of identity would mean loss of traditions, ways of living, culture, crafts, and folklore.