Globalization Needs a Reality Check

Globalization offers no guarantees – and does not necessarily lead to diversity, innovation and competition. Sometimes, large players present multiple brands, using globalization to mask ownership and monopolies. Consolidation of markets into global monoliths can encourage a standardization that inhibits innovation. Economic globalization does influence politics, because countries seeking foreign investment must embrace sensible policies and politics. Parties to globalization – multinationals, governments, investors, workers – expect continuity and transparency. Developing nations expect globalization to alleviate poverty, and authors Lyal White and Jonathan Bain compare China, as the largest recipient of direct foreign investment, $60 billion, in 2005, with Venezuela and Bolivia, the leaders of which are taking steps to nationalize industries. Ideology, nationalization and exclusionary polices do not attract foreign investment, the authors argue, while innovation, combined with free-market principles and constructive state intervention, contributes to progressive integration. – YaleGlobal