Very few people, groups, or governm

Very few people, groups, or governments oppose globalization in its entirety. Instead, critics of globalization believe aspects of the way globalization operates should be changed. The debate over globalization is about what the best rules are for governing the global economy so that its advantages can grow while its problems can be solved.

On one side of this debate are those who stress the benefits of removing barriers to international trade and investment, allowing capital to be allocated more efficiently and giving consumers greater freedom of choice. With free-market globalization, investment funds can move unimpeded from where they are plentiful (the rich countries) to where they are most needed (the developing countries). Consumers can benefit from cheaper products because reduced tariffs make goods produced at low cost from faraway places cheaper to buy. Producers of goods gain by selling to a wider market. More competition keeps sellers on their toes and allows ideas and new technology to spread and benefit others.

On the other side of the debate are critics who see neoliberal policies as producing greater poverty, inequality, social conflict, cultural destruction, and environmental damage. They say that the most developed nations—the United States, Germany, and Japan—succeeded not because of free trade but because of protectionism and subsidies. They argue that the more recently successful economies of South Korea, Taiwan, and China all had strong state-led development strategies that did not follow neoliberalism. These critics think that government encouragement of “infant industries”—that is, industries that are just beginning to develop—enables a country to become internationally competitive.

Furthermore, those who criticize the Washington Consensus suggest that the inflow and outflow of money from speculative investors must be limited to prevent bubbles. These bubbles are characterized by the rapid inflow of foreign funds that bid up domestic stock markets and property values. When the economy cannot sustain such expectations, the bubbles burst as investors panic and pull their money out of the country. These bubbles have happened repeatedly as liberalization has allowed speculation of this sort to get out of hand, such as in Indonesia, Malaysia, and Thailand in 1997 and since then in Argentina, Russia, and Turkey. According to critics, a strong active government is needed to assure stability and economic development.

Protests by what is called the antiglobalization movement are seldom directed against globalization itself but rather against abuses that harm the rights of workers and the environment. The question raised by nongovernmental organizations and protesters at WTO and IMF gatherings is whether globalization will result in a rise of living standards or a race to the bottom as competition takes the form of lowering living standards and undermining environmental regulation. One of the key problems of the 21st century will be determining to what extent markets should be regulated to promote fair competition, honest dealings, and fair distribution of public goods on a global scale. See also Development Economics.