What Issues Are Raised by Globalization for Business Ethics?
Globalization has strained the ethical resources of writers since the phenomenon developed en masse after World War II. The process of globalization can be summarized as the integration of global markets -- each at different levels of development -- under the control of banks, non-governmental organizations (NGOs) and corporations. In short, it can be called the "privatization of global politics," and with it, ethical questions exist at the most fundamental level.
Other People Are Reading
-
Wages
-
At least one major reason why firms "go global" is to take advantage of the fact that in the developing world, wages and labor legislation are less than in America or the EU. This places the already struggling states in the developing world at a disadvantage, since they must be as welcoming as possible to attract international investment. To be "welcoming" often means to lower wages to attract investment. What develops is a "race to the bottom" where developing states realize that they must help to suppress wages in order to become "competitive" in global markets.
States
-
The fact that firms are global means that a central political force -- corporate cash -- now is not connected to any one government. What this means in practice is that states lose power at the expense of global privatization. States, in order to remain competitive, must do the bidding of the multinational firm and, hence, local initiatives must be conformed to the global order. Democracy -- in the broadest sense -- is put on hold in the interest of the firms. Governments now must either listen to the needs of localities and place restrictions on firms, or they conform themselves to the new global order and lose legitimacy. Its either investment or democracy -- or so it seems -- not both.
-
Democracy
-
Firms in the developed world have more choices than even before. This might not be good for labor. For example, textile plants in the American South are faced with demands for higher wages, better benefits and more vacation time. One of these firms might realize that workers in China are willing to work -- or are forced to work -- for less pay and substantially fewer benefits than American workers in, say, South Carolina. The firm goes to the American Export-Import bank to get foreign investment insurance and advice, and subsequently packs up for China. Now the South Carolinian workers are out of their jobs. This means that workers in other industries, seeing this phenomenon, will simply keep quiet and take whatever the firm gives them, knowing the mobility of capital silences most of their demands.
Modernization
-
Concerning the developing world, substantial foreign investment and local "copycatting" means that life changes. Cities become larger, wages go down as competition increases and people are forced from the land to seek work in urban areas. In short, they are becoming "modern." They have their lifestyles changed radically without their consent, and are, quite often, ignorant of the massive global forces that are controlling these developments. Cultures, religions, traditions and often entire villages are altered so as to conform to the labor and support needs of the major multinationals.
-
