What are the merits and demerits of globalisation?

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  • The following are the negative impacts of globalisation :

i) Low wages and long working hours in potentially hazardous conditions due to requirement of cost effective production.

ii) Uncertain terms of employment. Casual workers are hired on contract when demand is high and laid off when demand declines.

iii) Multi national companies are prone to shift their centres of production in accordance with the benefits they receive.


The worst hit by globalisation are small scale industries as they do not have the capital or resources to compete with large MNCs. Casual workers are also affected as they have to work long hours for low wages and uncertain terms of employment. They are not entitled to many benefits enjoyed by regular workers.


Consumers benefit from globalisation due to the following reasons:

  • They benefit from the lower prices
  • better quality of products arising from increased competition
  • increases the purchasing power of an individual
  • best practices of production gets disseminated across political boundaries

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Advantages: Globalization is absolutely essential for capitalist expansion. Without globalization, capitalism is dead. Capitalism needs continuing expansion in order to survive. That expansion cannot be realized within national boundaries. World War I and World War II were fought over this very issue. 

Globalization provides for the efficient utilization of the worlds resources. 


Disadvantages: Globalization increases tensions between competing capitalist states as both fight over access to lucrative markets. Those tensions must resolve themselves through war.

Globalization also serves to drive down wages as workers in each country are pitted against each other in the capitalist bid for the lowest costs. Eventually, this must create class tensions which threaten the very survival of capitalism. 

As capitalism invests in globalization, the capitalist elite must work diligently to insure that labor remains within national boundaries. The globalization of the labor movement is the defining moment of socialist revolution.

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