Globalization 1

1
Globalization (1)

• Globalization is a process that leads to the
  increasing movement of goods, services, and
  capital across borders. Global companies source,
  produce, and distribute goods and services in
  multiple countries. Like any process, it can be
  morally good or bad.

2
Globalization (2)

• One of the economic drivers of globalization is
  comparative advantage (as opposed to absolute
  advantage). With regard to globalization, the
  political debate and the economic debate often
  fail to intersect.

3
Why globalization now?

• Globalization is being driven by
• communications-technology advances,
• transportation systems,
• the increasing importance of MNCs,
• social and political reforms, and
• multilateral trade and financial institutions
  like the IMF, the World Bank, and the WTO.

4
Arguments for globalization

• These include
• comparative advantage (as noted before),
• price reductions for consumers,
• increased choices,
• worldwide allocative and productive efficiency,
  and
• jobs for people in developing countries.

5
Arguments against globalization

• These include
• job insecurity,
• potential weakening of labor and environmental
  regulations,
• loss of national autonomy, and
• erosion of local cultures.
• There is also a debate about whether
  globalization supports or inhibits democracy.

6
Perfect versus imperfect duties

• Perfect duties are held by specific classes of
  individuals (parents have a perfect duty to care
  for their children). Imperfect duties are owed
  to those who have rights, but it is unclear who
  should fulfill those duties.
• One major ethical issue regarding globalization
  is what perfect duties corporations owe, and to
  who.

7
The ethics of globalization (1)

• The main challenge companies face with regard to
  globalization is doing business in countries with
  differing human rights and environmental
  standards. Global codes of conductalong with
  social reporting and independent monitoringare
  partial solutions to these challenges.
• It is also the case that through constructive
  engagement, MNCs can have positive effects on the
  countries where they operate.

8
The ethics of globalization (2)

• Although there are lots of codes created by
  civil-society groups and multilateral
  institutions like the UN (Global Compact) and the
  ILO, there is more convergence than divergence.
  NGOs have played a key role in defining ethical
  norms for MNCs.
• Final discussion question What are the ethical
  norms that companies should follow wherever they
  do business?