Criticisms of Globalization: Growing Income Inequality

More Losers than Winners

The previous articles in this module covered the topic of globalization in depth.

Some of the points of discussion were about how globalization has succeeded in lifting millions of people out of poverty. While accepting this fact, it is also the case that globalization has created income inequality which when coupled with inflation and falling living standards has resulted in a class of people who are losing out more than gaining from the process of globalization. If we take each of these factors into consideration, it becomes clear that globalization leads to worsening income gaps and the transfer of wealth from the bottom to the top.

In the words of some critics, globalization is a process where the poor end up subsidizing the lifestyles of the rich. This is certainly not desired or desirable in a world where social justice and equity have to prevail.

Increase in Social Tensions

Globalization by virtue of being a process that benefits elites and the educated more has contributed to social tensions where the native populace without the benefit of English speaking skills or the necessary attributes to partake of the fruits of globalization end up resenting the success of the class that benefits from globalization. This has resulted in social tensions wherein those left out of the process of globalization envy those who have benefited from it and this leads to periods of unrest and fights at the slightest provocation.

Indeed, as one of the experts on globalization, Amy Chua puts it, the world is on fire because of these inequalities, and it is high time the policymaking elite in all the countries did something to alleviate and redress the gross imbalances resulting from globalization.

Lack of Class Mobility

The ongoing global economic crisis has brought home the fact that youth born into a certain class are likely to remain in that socio-economic class without hopes of social mobility or progress. This is because globalization has skewed the game in favor of those with the required skills and attributes and has restricted the upward movement of people along the social ladder. Though this is just one reason, the other reason of class stratification and lack of opportunities are equally pernicious as far as the limitation of social mobility is concerned.

Therefore, it is high time for the elites to address these problems because ultimately the rising tide should lift all boats and not only those that belong to the privileged class.

Final Thoughts

In concluding this article, it is worthwhile to remember that any economic growth must be equitable and environmentally and socially responsible.

Growth without equity and consumption without justice are likely to lead to chaos and unrest and if the events of the Arab Spring are anything to go by, the first shots in the war between the haves, and the have-nots are are being fired.

Therefore, the fact that globalization has worsened the income equalities and has contributed to social tensions and unrest means that despite the heady and giddy promises of the process, the fact remains that virtually nothing on the ground has changed.

❮❮   Previous Next   ❯❯

Authorship/Referencing - About the Author(s)

The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to and the content page url.

International Business