Many people are quick to condemn globalisation, which they see as the result of powerful or monopolistic multinationals taking over world markets. They claim that globalisation will lead directly to loss of human rights, poverty, corruption and the death of democracy. In actual fact, globalisation together with the associated benefits is the key to alleviating many of these social ills.
Globalisation could not occur without relatively free trade, and free trade leads to economic growth. When international markets are allowed to perform according to natural market forces, specialistion and exchange between countries is encouraged. According to Adam Smith's Theory of Absolute Advantage, this specialisation will lead to economic growth for all involved. And when there is economic growth everybody benefits: more goods and services are produced and consumed, incomes rise and unemployment levels fall.
The demon of globalisation is the so-called global capitalist: the multi-national corporation (MNC). These businesses are perceived by many to be greedy, corrupted, unscrupulous and all-powerful. Certainly they are profit-driven, as is all market activity. However, this does not make them bad any more than the profit-driven corner dairy is bad. Many MNCs supply important products which could be used in the alleviation of social problems, particularly in the Third World: food, clothing, medicines and even education.
However, to prevent the globalisation demon from becoming a reality, the power held by these MNCs must be limited. They must regulate to ensure protection of human rights, the environment and democracy. In order to reap the benefits of free trade, goverments must not apply trade restrictions to these ends; instead, the regulation must be domestic. If all the key open economies of the world had in place regulations to prevent exploitation of our scarce resources (natural and human) by MNCs, they could be allowed to trade freely on the international stage and all would benefit from the resulting world economic growth.
The perceived horrors of globalisation are not yet widespread, and for this we can be thankful. However, we as people must act now to safeguard our vulnerable and scarce resources. Free trade, globalisation and domestic regulation is the key.